IBM snaps out of its revenue doldrums, breaking a five-quarter losing streak in Q4

International Business Machines is living a case study of a large, established company vying to transform. Over the last decade, the technology elder has struggled to move into areas like cloud and AI. IBM has leaned on a combination of its own R&D abilities and deep pockets to push into modern markets, but has struggled to turn them into revenue growth.

At one point, Big Blue posted 22 sequential quarters of falling revenue, a mind-boggling testament to how hard it can be to turn around a juggernaut. More recently, IBM shrank for another five consecutive quarters, a streak it broke with yesterday’s news that it had beat analyst expectations. 

The quarter brought modest, but welcome revenue growth. Perhaps more importantly, the company’s top line expansion was co-led by the old IBM mainframe business and its newest champion, Red Hat.

IBM can be happy for the positive financial news, for now at least, but it needs to repeat the result. The challenge it faces moving forward will include finding a way to continue revenue growth while modernizing its product line and ensuring that its huge Red Hat purchase continues to perform.