LESS SMALL BLUE

IBM might finally be in for a sales turnaround after 17 quarters of falling revenue

It’s been a startling 17 quarters since IBM has produced any sales growth, when compared to the year-ago quarter.

The slide was somewhat inevitable, as CEO Ginni Rometty took on the unenviable task of trying to modernize the company and started selling off commoditized businesses she saw as being marginal to IBM’s future.

Since taking the reins at IBM in 2012, she has shifted the company’s focus to cloud services, as well as analytics, cybersecurity, and other more modern tech services that big companies might need—which she refers to as “strategic imperatives.” She also committed to investing $1 billion in Watson, the company’s cognitive computing software, as it aims to sell the artificial intelligence software platform to companies.

Her strategies seems to be working: The “strategic imperatives” and cloud business lines grew 12% and 30% respectively in the second quarter, accounting for over half of the company’s revenue for the period.

Overall, the company brought in $20.2 billion in revenue in the second quarter—just shy of the $20.6 billion it brought in during the same quarter last year.

If Rometty and IBM can keep up this momentum, the losing streak for revenue growth just might snap. (Looking at the negatively undulating chart above, it seems that, if the pattern holds, IBM will likely stop the slide in the next quarter or two.)

And who knows—if IBM can keep plugging along with its current strategy, it might be able to use some of the longer-term technologies it’s working on to fundamentally change the world, as it has done so many times before. Big Blue isn’t licked yet.

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