IBM has reported earnings of $21.8bn for the fourth quarter of 2016, as the company shifts from its traditional business to cloud and artificial intelligence (AI)-based products and services.
The company said its cloud revenue for the full year was $13.7bn, up 35%, while revenue in its cognitive solutions business, which includes software and transaction processing software revenues, grew by 1.4% to $5.3bn. Sales in this business were driven by demand in cloud, analytics and security, it said.
For the fourth quarter, IBM reported a decline in revenue for its global business services, which includes consulting, global process services and application management, of 4.1% to $4.1bn, while its technology services and cloud platforms business, which includes infrastructure services, technical support services and integration software, grew by 1.7% to $9.3bn. Here, growth was driven by strong hybrid cloud services, analytics and security performance, said IBM.
Meanwhile, IBM’s revenue in systems, which includes systems hardware and operating systems software, declined by 12.5% to $2.5bn.
During the earnings call, senior vice-president and CFO Martin Schroeter attributed the decline in systems earnings to a shift in IBM’s strategy. In a transcript of the call, posted on the Seeking Alpha financial blogging site, Schroeter said: “For systems, our revenue and gross profit performance were driven by growth in z Systems, offset by power and storage declines.
