IBM leans on AI, hybrid cloud as infrastructure business stalls.

11 May 2023

IBM’s Q1 2023 financial results revealed a modest 4.5% revenue growth, led by the software and consulting businesses. Despite a flat infrastructure revenue, the mainframe segment experienced a robust increase of over 10%. Compared to the previous year, core services such as platform, mainframe, and professional engagements showed stability, or single-digit growth. While consulting projects experienced a slowdown, CEO Arvind Krishna remains optimistic about the prospects of hybrid cloud adoption and AI for enterprise productivity driving revenues throughout 2023.

To remain competitive with industry leaders such as Amazon, Google, and Microsoft, IBM has strategically focused on leveraging its hybrid cloud and artificial intelligence capabilities. Many of IBM’s clients have transitioned to cloud-based models, aiming to reduce costs and complexity while increasing agility to meet customer demands.

IBM’s traditional on-premises model now features hybrid cloud capabilities to serve its clients better. The company has effectively transformed its internal workloads into the cloud, resulting in a significant 90% reduction in operating costs. By offering advanced AI, machine learning, and cloud-based analytics solutions, IBM intends to extend this strategy to its external customers, creating potential growth opportunities within its customer base.

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