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IBM Sees Strong Order Backlog Growth

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Factors contributing to backlog growth

IBM’s (IBM) order backlog has continued to grow strongly thanks to several contract wins, cloud migration, growing demand for its Watson AI technology in health and financial services, and the company’s strong presence in the blockchain market. The company has gained important clients, including Walmart (WMT) and Unilever (UN).

The data explosion due to increased Internet-device connectivity has boosted demand for machine learning and AI across industries. Strong economic conditions have also increased IT spending, making for larger deals.

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Signings

As shown in the graph above, IBM’s backlog has grown at a compound annual rate of 1.1% over the last five quarters. In fiscal Q1 2018, its backlog rose YoY (year-over-year) to $121.3 billion from $116 billion, and its signings rose YoY to $9.3 billion from $7.9 billion. In the last five quarters, the company has struck contracts worth $52.2 billion, and they have grown at a compound annual rate of 4.2%.

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