Big Blue’s fourth quarter 2017 cloud revenue increased 30 percent to $5.5 billion, helping the company post its first overall revenue increase after 22 straight down quarters.
IBM reported fourth-quarter revenue of $22.5 billion, up 4 percent year-over-year. The company’s cloud business brought in $17 billion in annual revenue in 2017, up 24 percent for the full year.
“To put that $17 billion in perspective, it’s up from $7 billion just three years ago,” said Martin Schroeter, SVP of global markets at IBM, on a conference call with analysts.
Cloud revenues included $9.3 billion in “as-a-service,” and $7.8 billion for other cloud-related hardware, software, and services.
In the fourth quarter, revenues from analytics increased 9 percent compared to last year. Revenues from mobile grew 23 percent, and security revenue was up 132 percent year-over-year.
Mainframe sales also boosted IBM revenue in the fourth quarter. Its “systems” business, which includes hardware and operating systems software, increased revenue 32 percent to $3.3 billion, driven by Z mainframe sales, which were up 71 percent.
Schroeter said he expects the company’s growth to continue as it moves more services to the cloud.
“Not only are we building and moving new SaaS properties into the cloud,” he said, according to a Seeking Alpha transcript, “not only are we building the platform-as-a-service and building ecosystems around that, we have north of [a] $120 billion backlog in our services business that we’re in the process of moving to the cloud. We’re moving our whole services platform on to the IBM Cloud … we’ve got a lot of scale coming our way.”
Notably absent from the call was any talk of workforce reassignments. IBM reportedly plans to “redeploy” 30,000 employees — one-third of its global workforce — this year.
IBM Marries Salesforce
IBM also today announced an expanded partnership with Salesforce that includes the “marriage” of IBM Cloud and Watson services with Salesforce Quip and Salesforce Service Cloud Einstein. IBM will build new applications that will be embedded into Quip documents. The companies will also integrate their Watson and Service Cloud Einstein products, using artificial intelligence (AI) to help companies personalize interactions with customers based on recent calls or messaging chats.
“There is a perfect marriage between Salesforce and IBM,” said Rachael Cotton, senior manager for machine assisted service engagement at Autodesk, which is one of Salesforce and IBM’s joint customers.