IBM sees revenue jump, expanding opportunities from hybrid cloud

IBM added 250 hybrid cloud platform customers during the second quarter and is seeing significant increases in revenue for hybrid cloud infrastructure, software and consulting services, according to the company's second quarter 2022 earnings report issued this week.

“Growth [in the second quarter] was driven by our hybrid cloud and AI capabilities,” said Jim Kavanaugh, CFO and senior vice president of IBM, during the earnings call, according to a Motley Fool transcript. “Hybrid cloud revenue for the segment now represents $9 billion over the last year, up 23%.”

He added, “Across the four Hybrid Platform and Solution business areas, our annual recurring revenue, or ARR, is nearly $12.9 billion, up 8%... The expansion of our skills, capabilities and ecosystems are enabling us to capture demand as we drive adoption of our hybrid cloud platform and help clients with their digital transformations.”

With the 250 hybrid cloud platform customers added during the most recent quarter, IBM now has more than 4,000 clients for hybrid cloud platform products.

The company's progress in this market also extends to consulting, where hybrid cloud revenue from consulting services grew 32% over the last year to $8.6 billion, Kavanaugh said.

IBM Chairman and CEO Arvind Krishna noted during the earnings call, "Apart from working with a greater number of clients, those who adopt our platform tend to consume more of our solutions across software, consulting, and infrastructure, expanding our footprint within those clients. Recently, clients such as P&C, Barclays, and Citi have chosen our hybrid cloud capabilities to unlock more business value and meet rapidly changing client demands."

Kavanaugh also indicated during the call that IBM continues to make moves to expand its hybrid cloud market opportunities, including last week’s expansion of the Power10 server portfolio to offer high-end security and other capabilities, including pay-as-you-go consumption, to mid-sized and “scale-out” clients that are pursuing hybrid cloud migrations.