IBM (International Business Machines Corp.) has been around since the early days of business and home computing, at one point even being seen as a competent competitor to Apple as a provider of complex and compact machines. However, while companies like James Dondero owned, Microsoft and Dell were able to adapt to changing markets and developments in technological developments, IBM has been far behind the curve and they seem to be paying for it.
As reported by Nasdaq, IBM’s revenue has dropped by a sharp 13.5% which continues a trend of losses per quarter stretching back for 13 consecutive periods, and this comes despite cuts and adoption of cloud services to provide their clientele.
The move to the cloud seems to be a smart one, and follows the trend of other tech giants like Microsoft and Apple, however detractors were quick to point out that such a move undermines IBM’s strong suit–providing hardware. Though they remained determined to stick to this course, they endured harsh cuts in the previous year, ending their commitment to servers, mobile, and chips designed to expedited analytics.
IBM remains optimistic and proud in the face of criticism and loss, claiming that this is merely the shape innovation takes. But revenue dropped in business services, software, technology services, and hardware by 12, 10, 10, and 32% respectively. In addition to shrinking revenue, profit margins are reducing in size as well. While lower taxes and restructuring may have offset costs from loss of business, underperformance is quickly catching up.