IBM bets the farm on big data in annual report

IBM is utterly focussed on big data and analytics as its future growth engines, according to its annual report published over the weekend. But the company has hedged a little on the future of its semiconductor and hardware businesses.

Available here, the least-brochure-like bits are to be found in the A Letter from the Chairman (PDF) Virginia Rometty, who offers the insight that plenty of organisations are choking on data. To clear their airways, different infrastructure, hybrid cloud and cunning analytics will be needed.

Rometty claims IBM has “built the world’s broadest and deepest capabilities in Big Data and analytics—both technology and expertise.” Big Blue apparently has 15,000 people in the field, including 400 mathematicians, and is now directing two thirds of its research effort towards analytics.

On the cloud front, Rometty claims “IBM today is the leader in enterprise cloud” thanks to “investments of $7 billion on 15 acquisitions, most notably SoftLayer in 2013.” Leadership is also due to the fact “We provide the full spectrum of cloud delivery models—infrastructure as a service, platform as a service, software as a service and business process as a service,” along with “1,500 cloud patents and … by thousands of cloud experts.”

Just how the likes of AWS and Microsoft might respond to those statements, The Reg cannot say. We're guessing they'll dispute IBM's choice of leadership metrics.

On the infrastructure front, IBM says selling Lenovo was “consistent with our continuing strategy of exiting lower- margin businesses, such as PCs, hard-disk drives and retail store solutions.”

“But let me be clear—we are not exiting hardware,” Rometty adds. “IBM will remain a leader in high-performance and high-end systems, storage and cognitive computing, and we will continue to invest in R&D for advanced semiconductor technology.”

Just what is meant by continuing to invest in semiconductors isn't explained, which may keep eyebrows raised after recent rumours suggested Big Blue would offload its chip business. The phrase “continue to invest” does not rule out a sale and ongoing joint research engagement.

Rometty also signals “... shifting the IBM hardware business for new realities and opportunities.” That means “... accelerating the move of our Systems product portfolio—in particular, Power and storage—to growth opportunities and to Linux, following the lead of our successful mainframe business.”

The letter also points out that IBM continues to do well financially, continuing an eleven-year run of growth in earnings-per-share even if pre-tax income dipped by eight per cent. The big bet on big data is expected to turn that last item around, before big trouble brews. ®