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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.