IBM’s cloud revenue increased 22 percent during the third quarter led by customers implementing hybrid cloud. “We are wining with our hybrid cloud value proposition in the marketplace,” said James Kavanaugh, SVP and chief financial officer at IBM, on an earnings call with investors.
But this wasn’t enough to grow its overall revenue, which was down 2 percent compared to last year. Big Blue’s stock fell as much as 5 percent after the company reported its earnings on Tuesday.
The company posted revenue of $18.8 billion for its fiscal third quarter. Its overall cloud platforms and services was down 2 percent, year over year, with $8.3 billion in revenue despite growth in cloud revenue.
IBM’s “cognitive solutions,” which includes security, transaction processing software, analytics, and services connected to Watson posted $4.1 billion in revenue, down 6 percent.
Business services revenue was up 1 percent to $4.1 billion, led by consulting.
And its mainframe business and operating systems software also grew 1 percent to $1.7 billion.
During the call Kavanaugh stressed the company’s hybrid cloud strategy and touted its multi-cloud management tool that it launched a day earlier. IBM’s Multicloud Manager allows customer to manage and move their Kubernetes clusters across different clouds and data centers using a single dashboard. While the company says it’s “optimized for IBM Cloud,” it also supports other cloud environments from Amazon Web Services (AWS), Microsoft, and Red Hat.
“IBM’s approach to cloud is hybrid, secure, open,” Kavanaugh said.
The company rolled out its private cloud platform, called IBM Cloud Private, a year ago and now counts more than 400 global companies as customers, Kavanaugh said, adding “nearly all of these are competitive wins.” IBM added 95 new companies in this quarter alone.
The company’s public cloud ranks fifth in terms of global revenue and market share, according to Gartner’s latest numbers. AWS remained the top infrastructure-as-a-service (IaaS) public cloud vendor in 2017, followed by Microsoft, Alibaba, Google, and IBM.