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How IBM’s Cloud Business Performed in Fiscal 4Q17

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Sep. 1 2020, Updated 12:12 p.m. ET

Cloud contributed more than 20% towards 2017 revenues

Earlier in the series, we discussed IBM’s Strategic Imperatives segment’s performance in fiscal 4Q17. Within this segment, cloud continued to be a highlight. In fiscal 2017, IBM’s cloud services revenue rose 24.0% to $17 billion, which included $9.3 billion delivered as a service and $7.8 billion for hardware, software, and services to facilitate the implementation of extensive cloud offerings. Cloud revenue made up 21% of IBM’s total revenue of $79.1 billion in fiscal 2017. IBM’s cloud-as-a-service run rate rose 20.0% to reach an annual run rate of $10.3 billion in fiscal 2017. In fiscal 4Q17, IBM’s cloud services revenue rose $30% to $5.5 billion.

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IBM’s position in the cloud space

According to IBM, “IBM Cloud, which is built for the enterprise, each of the 10 largest global banks, nine of the top 10 retailers, and eight of the top 10 airlines are Cloud as-a-Service clients.”

IBM earned 1,900 cloud patents. The above presentation, prepared by Bob Evans, who was Oracle’s (ORCL) chief communications officer from 2012 to 2016, positions IBM as the third player behind Amazon (AMZN) and Microsoft (MSFT) in the overall cloud space.

According to RightScale’s 2017 “State of the Cloud” results, 85% of respondents said their organizations have multi-cloud strategies in 2017 compared with 82% in 2016. The report further stated that 58% have opted for a hybrid cloud strategy this year compared with 55% in 2016. IBM is a leader in the hybrid cloud space. Thus, increased adoption of the hybrid cloud space has helped the company to improve its position in the overall cloud space.

However, competition in the hybrid cloud space is mounting. Earlier this month, Microsoft (MSFT) announced the acquisition of Avere Systems. Please read Microsoft and Avere Systems: A Step Forward in Hybrid Cloud?

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