The year 2015 was not great for International Business Machines. They have been through a lot, including the decline in revenue on a year-over-year basis for the past 14 quarters in a row. The most remarkable of all was the 14% drop of revenues during the third quarter of last year. To add to that, the company did not also meet its expected earnings. "The stock has slumped in 2015, following a similar slump in 2014."
However, IBM is not losing hope. In fact, despite the loss in revenues, it is slowly making progress in terms of business transitions. "IBM's strategic imperatives, which include its cloud and analytics businesses, are growing at double-digit rates, and the company has poured resources into long-term growth opportunities like Watson and the Internet of Things."
Although this year will be far from great for IBM, it sure will be considered as better when compared to the previous ones.
In terms of revenue, IBM has reported two items that are not directly connected to the business itself but are still reflected as a loss: the selling of a few businesses in 2014 and the currency rates.
Meaning to say, these two factors, when not taken into consideration when talking about overall decline in revenue, IBM only has a decline of 1% year over year during the latest quarter.
IBM's decision to use Watson in the healthcare industry, partnering with a variety of healthcare organizations in an effort to improve patient outcomes and provide personalized treatment options, could help improve their business. Although this would take years, if successful, IBM could be generating billions of dollars in revenue from the healthcare industry alone.
CEO Ginni Rometty said they are aiming Watson to grow into a $10 billion business in a matter of 10 years, "but because the system needs to be trained on massive amounts of data for each application, progress in turning Watson into a major source of revenue has been slow."
