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How IBM’s Global Business Services Performed in 2Q17

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Aug. 1 2017, Updated 6:36 a.m. ET

Cloud grew the most in IBM’s GBS

International Business Machines’ (IBM) GBS (Global Business Services) segment saw its revenues fall 3.7% to $4.1 billion in 2Q17. On a constant currency basis, this decline amounted to 2.0%. IBM’s GBS segment encompasses global process services, consulting, and application management.

The Strategic Imperatives segment’s revenues in GBS grew 11% to $2.5 billion for the quarter, while Cloud grew 39% to $1 billion on a constant currency basis. Strategic Imperatives contributed more than 50% to the segment’s revenue. Cloud reported the highest growth in this segment.

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Accolades and improved prospects of GBS

Signings in IBM’s GBS segment grew for the second-straight quarter. This growth bodes well as it should lead to a backlog and an increase in revenues. As a result, the company expects an improved performance in the second half of 2017 in this segment.

IBM is shifting its resources from conventional enterprise application areas to companies like SAP (SAP) HANA, Workday (WDAY), and Salesforce (CRM). Strategic Imperatives’ cloud growth, in particular, indicates that the company is focused on enhancing its digital offerings.

Notably, in a recent report titled “Perceptions of Consulting in the GCC in 2017,” Source Global Research placed IBM’s GBS segment as the industry’s top producer of thought leadership for the sixth time in a row.

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