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Boot-Up Problems for IBM

This is a syndicated repost courtesy of Statista | Infographics. To view original, click here. Reposted with permission.

On Tuesday, computer company IBM reported a small increase in quarterly revenue for Q4, ending a drought in revenue and falling sales figures over the last two years.

The earnings report comes just after IBM purchased software giant Red Hat for nearly $33 billion, making it the largest acquisition in the company’s history. Acquiring Red Hat falls in line with IBM’s new approach to embracing cloud computing and capturing a portion of the cloud-based services market share competitors like Amazon and Microsoft have dominated.

One of the top reasons for the stagnation of IBM in recent years can be attributed to their slow adoption of cloud-based services and infrastructure, platforms that were quickly filled by Amazon Web Services and Microsoft Azure. As of the end of last year, those two companies held a combined 58 percent share of the total global market for public cloud infrastructure, with IBM Cloud holding only 3 percent.

Overall, worldwide spending on cloud computing is above $20 billion and projected to continue rising, and IBM may be on track to position themselves for growth in that area for the future.

IBM may need to hurry, as their market valuation and stock price haven’t yielded positive results for long-term investors in over five years.

This chart shows the stock price of IBM in U.S. dollars between January 2015 and January 2020.

IBM stock stagnating

Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

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