IBM 2020: Cloud computing will be the key business sector

IBM predicts 2020 will be a tough year and it will continue to rely on the "strategic imperative" business to develop.

The giant IBM’s shares price was immediately dropped by 4%, after the publication of the financial statements of the fourth quarter in 2015. Although the business results in this quarter still exceeded the expectations of analysts, it looks like IBM is still weakening. It also forecasts a tough 2020.

Specifically, the revenue fell 9% compared with the same period last year, reached $ 22 billion, the profits reached $ 4.5 billion. The main cause of this decline is the software sales fell to 11%. Meanwhile, revenue from IT services was down 7%, sales of server business segment were down 1%. However, if excluding the impact of currency exchange rates, total revenue of IBM fell only 2%.

The company also said 2016 would be a difficult year and thus, might reduce the predicted profit below expectations by analysts. Shares of this giant also have touched the level of 123 USD, 30% lower than the highest price in more than one year.

However, in this grim picture, IBM still had a shining point that they called "strategic imperatives". That is all business segments, including cloud computing, cognitive computing and data analysis software system, were based on its supercomputers.

IBM reported total revenue of these "strategic imperative" business segments amounted to nearly 29 billion dollars in the fiscal year 2015. This $ 29 billion figure is equivalent to 35% of IBM's total revenue for the full year, growth of 26% compared to 2014.

IBM's annual revenue was 81.7 billion dollars in 2015, reached 13.1 billion USD profit.

And in that growth, the cloud computing business is still the main key to revenue of $ 10.2 billion in the fiscal year 2015. IBM said it would be a key strategy of the company in 2016, promising to continue breaking the previous sales records.

Cloud computing has been and will continue to be business segment extremely attractive for large technology companies like IBM, Amazon or Microsoft. The growth of these companies in recent years depends largely on the cloud computing business. In the context that the other business markets are showing signs of slowdown as smartphones, computers, software sales, the cloud computing will continue to help revive the business situation of these big guns.