Can IBM get back to the top again?

The changing landscape of the IT industry has changed the fortunes of many companies. While companies like AWS, Microsoft and Google have been able to cash in on the fortunes, others like IBM and HPE haven’t been so lucky. In fact, HPE recently closed its low-end cloud server business because it’s not profitable for the company any more.

As for IBM, the changes have been too hard. This company was deep-rooted in the traditional server and infrastructure business, so it has been tough to adapt to new technologies like AI and cloud that need a paradigm shift in the way the infrastructure is setup and handled.

Over the last 21 quarters, this almost-century-old company has seen falling year-on-year revenues. In fact, Warren Buffet, the chief executive of Berkshire Hathaway announced that in May of this year, the company sold about a third of its stake in the company. This alone amounted to around $13.5 billion.

To make up for this loss, the company has been aggressively pushing into the areas of cloud computing and AI, but is this a story of too little too late or can IBM get back to the top again?

Well, the latest results announced by the company on October 17th show that revenues have slipped again. However, the good news is that revenues fell lesser than expected. So, many supporters of the company including its management believe that the next quarter could see good returns. This positive statement by the company caused its shares to rise by 8.9 percent the following day, which is the biggest single day gain in the stock market since 2009.

These signs indicate that good things are yet to come for the company and after all, there is still some hope. This is not the first time that IBM had to make this strategic shift in its operations. After almost a near-death in 1990s after the collapse of mainframes, IBM continued to find its niche and stay on top of the technology sector. In fact, if you look back, you’ll see that it was one of the first companies to adapt to the Internet and back open-source software. It assured investors of good returns within five years and even spent billions of dollars in buyback programs. This strategy worked well for the company and its investors.

Likewise, this time too, we can expect IBM to bounce back because it is after all doing the right things. Though AWS, Microsoft and Google have a huge lead in the cloud services market, IBM is not too far behind. With such diligence, good strategy and wise managerial decisions, it can definitely bounce back.


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