IBM Revenues, Profits Reveal 2012 Technology Spending Trends

IBM's Q2 2012 financial results were a mixed bag, revealing that corporate technology spending and long-term technology budgets face macroeconomic pressure. But as a whole, IBM (NYSE: IBM) continues to manage its business more effectively than many rivals, and CEO Ginny Rometty sounds optimistic.

The VAR Guy

July 18, 2012

1 Min Read
IBM Revenues, Profits Reveal 2012 Technology Spending Trends

IBM CEO Virginia Rometty

IBM‘s Q2 2012 financial results were a mixed bag, revealing that corporate technology spending and long-term technology budgets face macroeconomic pressure. But as a whole, IBM (NYSE: IBM) continues to manage its business more effectively than many rivals, and CEO Ginny Rometty sounds optimistic.

An example: While Intel (NASDAQ) cut profit expectations yesterday, IBM is raising its profit outlook for 2012. And there’s good news in such areas as IBM business analytics, cloud computing and software.

IBM Q2 2012 Financial Results

While discussing Q2 results, IBM said:

  • Net income rose 6 percent to $3.9 billion

  • Revenue fell 3 percent to $25.8 billion, falling slightly short of analyst expectations.

  • Business analytics revenues grew 13 percent in the 1H of 2012.

  • cloud revenue double in the 1H of 2012, though IBM didn’t mention which products and services fit the cloud category.

  • And IBM raised its full-year profit outlook.

  • IBM is hiring 200 to 300 software sales representatives each month through year end.

IBM’s financial results show that the company’s diversity — hardware, software, services — in high-margin markets have largely shielded the company from the profit challenges facing Intel, Dell, Hewlett-Packard and other PC-centric players.

“So when you look at it, our results demonstrate the strength of IBM’s business model, which is designed to deliver profiting cash on a sustainable basis,” said IBM CFO Mark Loughridge during an earnings call today.

For channel partners, IBM’s messaging remains consistent: Push beyond hardware to promote business analytics and cloud services. And bet heavy on software.

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