Investing in IBM: A must-know business overview




Based in New York, International Business Machines Corporation (IBM) is a globally diversified information technology company. It’s present in more than 170 countries. IBM’s operations are diversified, and so are its customers. IBM’s customers range from financial services and public, industrial, distribution, and communication companies to general businesses.

The company provides hardware and software for business servers’ storage products, custom-designed microchips, and application software along with outsourcing and consulting services, application management, and cloud services. IBM is known for its innovations, established customer base, and ability to adapt its products and services to a changing environment. But IBM’s dominant position in the IT industry has been questioned recently.

Revenue by segments

Diversified revenue base

IBM generates revenue primarily through five operating segments:

  1. Global technology services
  2. Global business services
  3. Software
  4. Systems and Technology
  5. Global Financing

The chart above shows the revenue contribution of each segment.

IBM generates its revenue from around the world. It organizes its geographic segments into:

  • The Americas
  • Europe, the Middle East, and Africa – or EMEA
  • Asia Pacific

Revenue geography

The chart above shows that IBM generates most of its revenue from the Americas and EMEA. But contributions from Asia-Pacific are also considerable.

A tough industry

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Besides IBM, other leading players, including Oracle Corp. (ORCL) and Accenture (ACN), also face pressure as the industry undergoes a transformation. Workday Inc. (WDAY) and’s (CRM) growing presence threatens Oracle’s  applications business. Oracle’s hardware business is also going through a rough phase.


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