IBM's Q2 earnings: Software revenues dip 10%, cloud up 70%

IBM has reported mixed second-quarter 2015 earnings as the company fell short of analysts' estimates. For the three months ending June 30, IBM reported $20.8 billion in revenue, a 13.5 percent decline from the $24 billion it brought in the same time period a year earlier. This happens to be IBM's 13th straight decline in quarterly revenue.Despite the sales fall, the company's executive are upbeat about the cloud and data business.While announcing the Q2 earning, IBM Chief Ginni Rometty said, "Our results for the first half of 2015 demonstrate that we continue to transform our business to higher value and return value to shareholders. We expanded margins, continued to innovate across our portfolio and delivered strong growth in our strategic imperatives of cloud, analytics and engagement, which are becoming a significant part of our business."[caption id="attachment_9868" align="alignleft" width="380"] Reuters[/caption]IBM's software revenues fell 10 percent to $5.8 billion from $6.5 billion the previous year. The software business was responsible for a huge part of the overall revenue fall. Revenues from IBM’s key middleware products, which include WebSphere, Information Management, Tivoli, Workforce Solutions and Rational products, were $4.0 billion, down 7 percent year-to-year.Global Technology Services segment revenues were down 10 percent (up 1 percent adjusting for currency and the divested System x business) to $8.1 billion. Global Business Services segment revenues were down 12 percent (down 3 percent adjusting for currency) to $4.3 billion.Revenues from the systems hardware segment totaled $2.1 billion for the quarter, down 32 percent (up 5 percent adjusting for currency and the impact of the divested System x business) year-to-year.  Revenues from z Systems mainframe server products increased 9 percent compared with the year-ago period (up 15 percent adjusting for currency). Revenues from Power Systems were down 1 percent compared with the 2014 period (up 5 percent adjusting for currency). Revenues from System Storage decreased 10 percent (down 4 percent adjusting for currency).Revenues from the company’s strategic imperatives --- cloud, analytics, and engagement --- increased more than 30 percent adjusting for currency and the divested System x business.Total cloud revenues increased more than 70 percent adjusting for currency and the divested System x business year-to-date, and is $8.7 billion over the last 12 months. The annual run rate for cloud delivered as a service -- a subset of the total cloud revenue -- increased to $4.5 billion from $2.8 billion in the second quarter of 2014.While, revenues from business analytics increased more than 20 percent adjusting for currency year-to-date.IBM CFO Martin Schroeter reassured investors that the company is on the right track, and that investing in newer technologies like cloud and analytics ig going to bring in money for the company, reported Fortune. "And IBM’s continued investment in cloud computing and analytics will not be slowing down any time soon," he pointed to the $700 million IBM has spent so far this year on acquisitions meant to grow those areas like its June purchase of the cloud company Bluebox and April acquisition of healthcare data company Explorys."It’s just going to take some more time," Schroeter said. “We will get returns on the investments in time.”