In 2019, IBM’s global technology services segment generated over 27 billion U.S. dollars of the company’s revenue, which for 2019 stood at around 77 billion U.S. dollars. In 2016, IBM first changed its segment reporting to reflect the company’s shift away from being a hardware, software and services company, and towards becoming a cognitive solutions and cloud platform company.
Realignment of IBM’s software portfolio
The change in business segment reporting followed IBM’s pursuit of management system and organizational changes. For example, the company created a cognitive solutions business, the segment where initiatives such as Watson, Watson health, Watson IoT, and transaction processing software are held. Merging multiple segments into one helped highlight their mutual importance to each other: linking Integration Software with Cloud Infrastructure and Platform, for example, reflected the importance of integration software to enterprise-grade hybrid clouds. These changes were made to provide investors with additional transparency on the direction of IBM’s business.
Moving to the hybrid cloud
One of IBM’s responses to its declining revenue is restructuring some of their business, moving into areas like cloud, blockchain, and artificial intelligence. The company looks to address its underinvestment in cloud by developing software and platform products. For example, its platform IBM Cloud aims to help customers shift their operations to the cloud environments. In early 2019, IBM acquired open source technology company Red Hat, which offers a hybrid cloud platform. As a major and innovative player in the industry, IBM consistently spends around 5 billion U.S. dollars on research and development, such as on advances in quantum computing and artificial intelligence.
IBM's global revenue from 2010 to 2019, by business segment
(in billion U.S. dollars)
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IBM. (March 3, 2020). IBM's global revenue from 2010 to 2019, by business segment (in billion U.S. dollars) [Graph]. In Statista. Retrieved November 27, 2020, from https://www.statista.com/statistics/274823/ibms-global-revenue-by-segment/
IBM. "IBM's global revenue from 2010 to 2019, by business segment (in billion U.S. dollars)." Chart. March 3, 2020. Statista. Accessed November 27, 2020. https://www.statista.com/statistics/274823/ibms-global-revenue-by-segment/
IBM. (2020). IBM's global revenue from 2010 to 2019, by business segment (in billion U.S. dollars). Statista. Statista Inc.. Accessed: November 27, 2020. https://www.statista.com/statistics/274823/ibms-global-revenue-by-segment/
IBM. "Ibm's Global Revenue from 2010 to 2019, by Business Segment (in Billion U.S. Dollars)." Statista, Statista Inc., 3 Mar 2020, https://www.statista.com/statistics/274823/ibms-global-revenue-by-segment/
IBM, IBM's global revenue from 2010 to 2019, by business segment (in billion U.S. dollars) Statista, https://www.statista.com/statistics/274823/ibms-global-revenue-by-segment/ (last visited November 27, 2020)