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Will the 107-year-old company IBM be "smashed" on the cloud computing track?

via:雷锋网     time:2018/10/17 22:02:04     readed:461

The financial report showed that the company achieved revenue of 18.756 billion US dollars during the period, down 2% year-on-year; realized net profit of 2.694 billion US dollars, down 1% year-on-year; earnings per share was 3.42 US dollars, exceeding market expectations of 3.4 US dollars.

  • The Cognitive Solutions division's revenue was $4.148 billion, compared to $4.4 billion in the same period last year, down 6% year-on-year.

  • Global business services revenue was $4.130 billion, compared to $4.093 billion in the same period last year, an increase of 1% year-on-year.

  • Revenue from the technical services and cloud platform divisions was $8.292 billion, compared to $8.457 billion in the same period last year, down 2% year-on-year.

  • Hardware system division revenue was $1.736 billion, compared to $1.721 billion in the same period last year, an increase of 1% year-on-year.

  • Global financial services revenue was $388 million, compared with $427 million in the same period last year, down 9% year-on-year.

  • Revenues from other divisions were $62 million, compared to $56 million in the same period last year, an increase of 11% year-on-year.

It can be seen that except for the small increase in revenues of the global business services department, hardware system department and other departments, other departments have declined across the board. Among them, the technical services and cloud platform departments have the highest revenue, and the cognitive solution department (including solution software and transaction processing software business) has the highest gross profit margin.

As traditional hardware business continues to shrink, IBM is seeking a difficult transition in recent years, and cognitive computing and cloud platforms have become the focus of IBM's key bets.

Although the cloud is a bright spot in IBM's frustrating quarterly results, in fact, the 107-year-old company is losing its competitiveness on the global cloud computing track.

Global cloud computing landscape: AWS/Azure/Google Cloud/Ali CloudControl strengthening

In the competitive landscape of the cloud:

  • AWS is the cloud platform of choice for enterprises with a market share of 34%, which is higher than the sum of its next four rivals;

  • Microsoft Azure, Google Cloud and Alibaba Cloud's revenue growth far exceeds the overall market growth rate;

  • According to data from 2018Q2, spending on cloud infrastructure services increased by 50% compared to Q2 in 2017, which is basically consistent with the growth rate in the first quarter.

  • Top 5 cloud giants have increased control over the market, and in the public cloud sector, they control nearly three-quarters of the market;

  • Small and mediumcloud serviceThe market share of the business has declined together;

  • Of the top 25 cloud providers, only three other companies have a significant increase in market share.

Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS, and hosted private cloud services) are currently significantly more than $16 billion, as most major cloud providers have released second-quarter earnings data. The growth rate of Q2 in 2018 is 50%, the growth rate for 2017 is 44%, and the growth rate for 2016 is 50%.

Analysts believe that this “polarization” phenomenon is showing that they continue to invest huge amounts of money in data center infrastructure and operations in a large and strategically important market that grows at an extraordinary rate. Is challenging the smaller competitors. Their increased market share clearly shows that their strategy is working.

In fact, it is true. On August 1, Google plans to build a third data center in Singapore with a total investment of $850 million. Companies such as Alibaba Cloud and Amazon are also investing heavily in data centers around the world.

What is the status of IBM in this pattern?

In fact, in the world, IBM's market share is relatively stable at around 8%, and has been ranked behind the four cloud giants. This achievement is mainly due to its ability to host private cloud services.

IBM CEO Ginni Rometty has been working to reposition IBM to a fast-growing cloud computing service provider, hoping to reduce reliance on traditional hardware products and reverse years of revenue declines.

In early July 2018, IBM announced that it will launch 18 IBM Cloud Availability Zones in six major regions around the world, including North America (Dallas and Washington, DC), Europe (Germany and UK), and Asia Pacific (Japan, etc.). In the large region, the cloud service map of nearly 60 data centers expanded again. At the same time, IBM also revealed the complete public cloud new features to its customers.

In 2017, IBM's cloud business revenue grew 20% year-on-year to $19 billion, of which $10.9 billion in revenue was service revenues + $8.1 billion in hardware, software and service revenue. In order to strengthen the customer impression in the cloud computing market, IBM also put a heavy bet on October 11, 2018, launched two major AI and cloud service platforms, and improved its operational framework in AI cloud services.

AI OpenScale, a platform that enables customers to build AI on virtually any infrastructure, will be available later this year for IBM Cloud and Cloud Private customers;

Multi-cloud Manager, an "open" solution designed to simplify the creation of applications that run on multiple cloud services. Run on the Kubernetes-based platform IBM Cloud Private.

Arvind Krishna, senior vice president of IBM Hybrid Cloud Computing, said in a statement:

“By adopting open standards to manage data and applications across the cloud, IBM Multi-cloud Manager will enable companies to expand their cloud investment and unlock the full business value of cloud computing. Its goal is not just to Make the most of your computer's computing power, but make full use of cloud computing to invent new business processes and enter new markets.

Trying to save yourself.

In the eye-catching stage of the earnings season, the platform for launching these two AI and cloud services, IBM is also very well-intentioned, the determination to bet on cloud computing can be seen very large.

Of course, there are many different interpretations of the issue of “publishing AI and cloud service platforms”.

Some people think that because IBM has missed the opportunity of the cloud technology revolution, it has been working hard to improve its position in this emerging field. IBM doesn't focus too much on building large data centers, just like the infrastructure that supports cloud giants Microsoft and Amazon. Instead, IBM positions itself as an expert in the field, helping large companies and governments integrate different cloud services with traditional internal computers.

IBM emphasizes: It can help customers migrate to AWS, Azure, Google Cloud, IBM Cloud and other platforms. As shown.

Image source: IBM official website

It seems that in the United States, IBM's position in the cloud computing market has not been recognized.

"IBM's move to licensing competitors' cloud service intermediaries is seen as a confession to other big competitors, or it's IBM's smart move to take a different approach in a crowded market."

In March 2018, IBM had an AI tool to competitors.DevelopmentWith its own cloud products, it has once again proved that IBM has the heart to interact with other market players to attract and retain users.

This hardware and software giant is changing the way it operates

Because IBM has hugeserverBusiness, which determines the product that it provides to users must be a combination of software and hardware, cloud computing is no exception.

On the hardware side, in April 2008, IBM introduced a new cloud-based product, the iDataPlex server, and a cloud-based storage service. The goal of IBM Cloud Computing is to popularize their Power and mainframe systems for specific workloads running on X64 servers.

On the software side, the “Blue Cloud” computing platform was launched in November 2007, enabling applications from around the world to access a large pool of distributed servers. Enables data centers to run calculations in an Internet-like environment. Cloud-related software includes: Tivoli server automation management software, IBM Serveice Management for Cloud Computing, Computing on Demand (CoD), lotusLive, and more.

IBM has also strengthened its AI capabilities by running 75 active blockchain networks to help protect banks from cyber attacks to enhance their appeal to customers. More than 400 companies have accepted IBM's security a year ago. Cloud private plan.

IBM is "basically changing the way it operates this company.

Wall Street analysts warn IBM: Faced with growth "traps"

Ginni Rometty, president and CEO of IBM, spoke with Gartner's Dennis Gaughan and others. October 16.

In what IBM calls "strategic demand" business areas, including hybrid clouds, artificial intelligence, security and digital, it has grown 13% in the past 12 months to $39.5 billion, which is close to IBM's 400 set in 2015. Billion dollar target.

Stifel analysts pointed out in a research report released on Tuesday that although IBM's recent quarterly results benefited from the new mainframe "Dongfeng", IBM still faces difficulties in revenue growth. In the short term, IBM's performance prospects are still not optimistic. .

IBM CEO Luo Ruilan is also leading IBM's repositioning: from selling traditional IT tools to focusing on growth markets and emerging digital tools such as cloud, AI, quantum computing and blockchain. She predicts that the blockchain will have an impact on the business within five years and urges the company to give priority to it now.

“We can see that the market is changing and we need to change faster.”

Obviously, IBM has a lot of work to do on the same track (cloud computing) that the opponent is moving faster: not only to alleviate the current revenue crisis, but also to make the 107-year business brand continue to go long.

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