Mixed IBM numbers on earnings show the company’s cloud involvement driving a bigger portion of revenue late this year.
This and other indicators point to the enduring appeal of cloud native systems to power business in 2020.
New reports show that IBM beat Q3 estimates with cloud revenues soaring 19% to around $6 billion.
“The boost from the cloud business further underscores IBM’s move to focus on its high-margin open hybrid cloud and AI solutions, which together account for more than half of its recurring revenue, by spinning off its IT infrastructure services unit,” writes a Reuters reporter today, looking at IBM’s cloud services versus the rest of its lineup.
You can also see signs of cloud adoptions in industry surveys like the Nutanix Enterprise Cloud Index (ECI) which surveyed more than 2,500 respondents, where public sector cloud interest is clearly on display.
“Investing in a hybrid cloud solution is one way the public sector can control its spending while also having the flexibility to choose the right workload for each application,” writes Tim Wallace at Federal News Network, noting that in the survey, 75% of public sector IT managers indicated their employers should be moving to the cloud more aggressively, while 77% believed a hybrid IT model is the most effective approach for public sector organizations. “The increased flexibility, and corresponding potential cost savings, will allow agencies to quickly adapt to the rapidly-changing environment spurred by COVID-19.”
As for IBM shares slumped 3%, part of which leaders attributed to specific client strategies in a volatile market.
“Clients’ near-term priorities continue to include operational stability, flexibility and cash preservation, which tends to favor (operating expenses) over (capital expenses),” Chief Financial Officer James Kavanaugh said. “This is resulting in some project delays and purchase deferrals.”
So whether you’re investing in IBM or anything else related to this trend, remember: it’s still the cloud.