11 Jul

How IBM Is Winning Such Massive Contracts

WRITTEN BY Aaron Hemsworth

Deal trends

IBM’s (IBM) strong product portfolio has won it huge US and international orders. In the last five quarters, the tech giant has secured deals worth $52.2 billion at an average of ~$10.4 billion every quarter.

How IBM Is Winning Such Massive Contracts

The graph above shows IBM’s deal totals over the last five quarters, during which they have grown at a compound annual rate of 4.2%. Moreover, the company has maintained a service backlog of ~$119 billion in the last five quarters, which may drive growth in Q2 2018. In Q1 2018, IBM’s total signings rose 17.7% year-over-year to $9.3 billion, and its service backlog stood at ~$121 billion.

What’s helping IBM win such huge deals?

IBM’s innovative product and service launches have helped it win large contracts. Its blockchain offering, launched in fiscal Q3 2017, has won it major contracts with Walmart (WMT) and Unilever (UN), and many financial companies are adopting its digital ledger platform for better security and tracking. IBM has gained over 750 networks in the last three quarters, maintaining a run rate of 250 networks each quarter.

The company’s Watson AI platform has gained traction across different industries, particularly the health and financial sectors. Watson Financial Services, buoyed by regulatory technology and commercial payment offerings, has attracted the likes of JPMorgan Chase (JPM), which is using it for risk and portfolio optimization. Meanwhile, Watson for Oncology is now available in more than 150 hospitals and health organizations. This growing popularity could win IBM even more contracts in Q2 2018.

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