IBM’s Cloud Computing Holds Major Potential: Should You Buy?

International Business Machines Corp.’s IBM investor briefing last month reflected its continuing focus on being a cloud-first company. In 2016, cloud revenues grew 35% to $13.7 billion, while the annual exit run rate for cloud-as-a-service revenue increased 53% on a year-over-year basis to $8.6 billion.

In its latest quarterly earnings report, the tech giant reported cloud segmental revenue growth of 45% from the prior-year period. Additionally, IBM has over 50 cloud centers globally, and its Bluemix platform was one of the largest open public cloud deployments worldwide at the end of 2016.

IBM’s Watson on Cloud is also a key growth driver for the company. The company expects Watson to reach over 1 billion people by the end of 2017, and IBM estimates the market for Watson on Cloud as a decision-making support system to be worth nearly $2 trillion by 2025.

Cloud Computing: Robust Growth Expectations

IBM’s growth expectations from cloud computing remain positive in the long haul. Management anticipates market opportunity in enterprise cloud to be greater than $800 billion by 2020. Moreover, the company expects more than 85% of enterprises to commit to multi-cloud architectures by 2018, which is positive for its hybrid cloud offerings.

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