How Has IBM’s Cloud Business Performed in 2Q15?



IBM’s cloud revenue posted 50% YoY growth

In its latest fiscal 2Q15 earnings release, IBM (IBM) stated that its cloud-computing revenue rose 50% on a YoY (year-over-year) basis. It generated $8.7 billion in the last 12 months. Excluding currency fluctuations, specifically dollar (UUP) appreciation and divestments, IBM’s cloud has reported 70% growth on a YoY basis.

As we saw previously in this series, cloud, along with mobile and analytics, has been classified as “strategic imperatives.” This growth can be considered an encouraging development.

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IBM’s cloud-related patents continue to rise

Until July 31, 2015, IBM has received more than 400 cloud patents in 2015. If we consider this figure for the last 18 months, it grew to 1,200 cloud patents. IBM has topped the list of US patent recipients for 22 consecutive years.

IBM is one of the four players that dominates the cloud space

In its 2Q15 report, Synergy Research stated that Amazon (AMZN), Microsoft (MSFT), Google (GOOG), and IBM collectively command 54% of the cloud infrastructure market. However, it’s Amazon that leads the cloud space with a 29% market share. Amazon is followed by Microsoft with 12%, IBM with 7%, and Google with 6% of the market.

One thing that’s worth considering here is that it isn’t just IBM, but other legacy software players like Oracle (ORCL) that are pushing the cloud space to grow. It’s the growing competition in the cloud space that’s urging these players to be price competitive. At the same time, it’s urging them to differentiate their products and offerings in various ways to cater to different customers.


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