NSA Leaks Pricked The ‘Cloud’ Bubble For US Tech Companies
August 7, 2013
Grazed from BusinessInsider. Author: Wolf Richter.
The cloud is a growth industry. And a religion in Silicon Valley: you’re better off with all your data and software stored in a data center somewhere on the planet. It’s at the core of Big Data. It’s a beacon of growth that revenue-challenged tech giants like Oracle and IBM wave in the faces of antsy investors.
IBM used the word 14 times during its earnings call in July. “Cloud computing,” “cloud offerings,” “cloud infrastructure,” it was all there. Revenues from the cloud jumped 70% during the first half, IBM bragged – to cover up an ugly tidbit: overall revenues fell 3.3%, and revenues at its US hardware division, Systems and Technology group, plunged 12%…
In between, it mentioned that it would write off $1 billion to pay for axing of 3,300 employees in the US and Canada – “workforce rebalancing,” it called it, and it’s trying to dump the unit. Meanwhile, it’s giving investors some fodder for hope, namely revenue growth from the cloud. Alas, on August 1, IBM admitted that it has been under investigation by the SEC since May on the very issue of revenues from the cloud.
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