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IBM revenues fall as hardware sales continue to struggle

But cloud, mobile and security are on the up
Fri Jul 18 2014, 16:00
IBM cloud, security and business analytics divisions all grew in Q2 2014

IBM REPORTED second quarter revenue of $24.4bn on Thursday, down two percent from year-on-year, as its hardware sales continued to struggle.

While revenue was down, IBM posted strong earnings of $4.1bn, up 28 percent on the same period last year, no doubt helped by job cuts at the company.

Despite the profits, though, there will be concern that many of the firm's established business units are failing to see much revenue growth. The Systems and Technology division fell 11 percent year on year. Elsewhere, profits in the Global Technology Services division fell 1.3 percent and Global Business Services was down 1.6 percent.

The one area of growth was its software division, with revenues of $6.5bn, up one percent compared with last year. This growth came from new areas of software IBM is pushing into, covering cloud, security and analytics.

Big Blue reported that cloud computing revenues have grown by 50 percent over the past two quarters compared to 2013. Business analytics (up seven percent), mobile services (up 100 percent), and security (up 20 percent) have also performed well.

IBM CEO Ginni Rometty touted these areas of growth as proof that the firm is heading the right direction. "In the second quarter, we made further progress on our transformation. We performed well in our strategic imperatives around cloud, big data and analytics, security and mobile," she said.

"We will continue to extend and leverage our unique strengths to address the emerging trends in enterprise IT and transform our business, positioning ourselves for growth over the long term."

Although the positive growth in these areas will be welcome, the money they bring in is not at a level where they can replace existing business units.

The financial report comes in the same week that IBM announced a major partnership with Apple to help push its iPad and iPhone devices into enterprise markets, as well as building a suite of tools and apps to make them suitable for key industries. µ


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