IBM CEO Arvind Krishna presents “the two most transformational enterprise technologies of our time”

Arvind Krishna

Mainframes still aren’t dead, but AI and hybrid cloud are where it’s at for IBM as Big Blue posts impressive profits and plans to smash its full-year revenue estimates.

IBM had total revenue of $14.1 billion for the quarter, up 15% year-over-year. Net profit was $3.2 billion. Of that, the company’s infrastructure business — which includes hybrid infrastructure, distributed infrastructure, support and mainframes — generated $3.4 billion in revenue, up 23.1% year-over-year. The software business — which spans transaction processing services, Red Hat, automation, AI, and security products and services — posted revenue of $5.8 billion, up $5.8 billion. 14.2% year over year. Meanwhile, the board totaled $4.7 billion, up 14% year-over-year.

It is to the growth of AI and hybrid cloud that CEO Arvind Krishna pointed out:

When I speak with clients, it’s clear that there is a real opportunity to help businesses take advantage of technology in today’s environments. Customers face everything from inflation to demographic shifts, from supply chain bottlenecks to sustainability efforts. By deploying powerful hybrid cloud and artificial intelligence technologies, IBM is helping businesses seize new opportunities, overcome today’s challenges, and emerge stronger… Our point of view is clear. Hybrid cloud and AI are the two most transformational enterprise technologies of our time.

IBM added “a few hundred” hybrid cloud customers during the quarter, Krishna said, citing Bank of America, Bharti Airtel and Samsung Electronics:

Hybrid cloud is already becoming the dominant architecture for enterprises. According to a recent survey by The Harris Poll, 77% of companies surveyed said they have adopted hybrid cloud for their organizations with data residing in multiple on-premises or edge clouds.

Hybrid cloud is about giving customers a platform that can generate value in these different environments. Our Red Hat-based platform enables our customers to consume software driven by open source innovation. IBM software has been optimized to run on this platform and includes advanced data and AI, automation and security features. Our consultants offer deep business expertise and co-create with clients to accelerate their digital transformation journeys and our infrastructure enables clients to take full advantage of a hybrid cloud environment.

As for the AI, he said:

As demographic shifts continue to add pressure on modern economies, coupled with wage inflation, companies are eager to deploy AI and automation capabilities at scale to boost their productivity levels. That’s what IBM helps businesses achieve.

As part of our business, we see four main use cases emerging: AI to interact and converse; AI to automate IT processes; AI to extract knowledge and insights; and finally, AI to automate business workflows, such as HR, supply chains, and financial reporting.

We strive to bring these capabilities to customers in all industries. For example, this quarter IBM Consulting partnered with the US Department of Veterans Affairs to automate workflows related to the distribution of retirement benefits. This frees up valuable VA staff time and expedites claims processing for veterans who need it most.


Despite the current turbulent macro environment, Krishna is confident that IBM is well positioned to weather the storm for two reasons:

First, we are B2B. We have almost no B2C activity – I could say none, but there is the weather activity which has a bit of a B2C element, but it’s tiny. So one is B2B. Second, we’ve done a lot of work over the past three years, and a lot of our portfolio is in critical areas, areas related to automation, areas related to using AI for productivity ‘company. And I think that theme of productivity is going to play out not just for this remaining part of this year, but for the next half-decade, maybe the whole decade.

The board is a good example of IBM’s resilience, he said:

The bulk of our consulting business is in digital transformation, helping our clients move to the cloud, not just our cloud, but AWS and Azure among them. It’s on properties that I think are pretty critical to our customers – SAP, CRM, Adobe are good examples. As you start to wrap and help them move to the cloud, both public and hybrid, help them do the digital transformation, help them take advantage of these massive productivity SaaS properties that I just named, even in an inflationary environment, even when the economy is not doing well, it’s usually the projects that stay the course. Maybe signatures come in smaller pieces. As long as we deliver well, people tend to sign up more and more in the future.

The overall business environment in the United States is robust, he added, as is Asia. Only Europe offers cause for concern:

In Europe, I think you shouldn’t put your head in the sand. I think with the mix of energy and inflation you can sense there’s some caution creeping into the conversations but not the data and not yet what we do as business there, but we’d be fools not to prepare that there might be a slight slowdown in Europe alone.

my catch

A solid quarterback by any standard. From.