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IBM Will Focus on SoftLayer and Watson in Fiscal 4Q15


Jan. 14 2016, Updated 10:08 a.m. ET

IBM to bolster its cloud and Watson offerings

So far in this series, we have discussed what is expected from IBM’s (IBM) upcoming fiscal 4Q15 results. Its Strategic Imperatives segment is likely to post double-digit growth in fiscal 2015.

In our recent IBM series, we discussed IBM’s various acquisitions in 2015. These acquisitions were Clearleap, Gravitant, Meteorix, Weather Company’s digital assets, Compose, Cleversafe, and StrongLoop, which the company acquired to expand the reach of its cloud-focused businesses. Gravitant was acquired with the intention of boosting IBM’s leadership in the hybrid cloud space.

Synergy Research’s recent report stated that IBM continued to be a top performer in the hybrid cloud space while Amazon (AMZN) ruled the overall cloud and the private cloud space.

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IBM expects SoftLayer to generate $1 billion revenue in 2016

Bloomberg stated that IBM expects SoftLayer, its cloud infrastructure business, to report $1 billion in revenues in 2016 as compared to $700 million–$800 million in 2015. In early 2015, IBM integrated SoftLayer with its System z and POWER Systems to keep its focus on hybrid clouds. For the 12 months ended September 30, 2015, IBM’s private and public cloud revenue stood at $9.4 billion.

If we go by Bloomberg Intelligence’s 2016 technology outlook, the leading players in the cloud space—Amazon, Microsoft (MSFT), and Google (GOOG)—expect to increase competition in this space in 2016 by slashing prices and by forcing other players to employ other ways to make money.

In fact, Amazon already embarked on its price-cut strategy and revealed further price cuts to its EC2 (elastic cloud) service in 2016. It also announced the opening of a new cloud region in Korea (EWY).


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