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More bad news for IBM after latest revenue report

IBM revenue and profit figures have declined for the thirteenth quarter in a row, although there was more positive news regarding the company’s cloud computing business.

Across Q2 2015 revenue fell by 13 per cent to $20.8 billion (£13.4 billion), although IBM claims that this is largely due to currency exchange rate fluctuations and the selling off of its x86 server business to Lenovo.

Read more: IBM’s 7nm chip set to improve computer speed by 50 per cent

In fact, CEO Ginni Rometty put a positive spin on the financials, choosing to focus on areas of growth within the business.

"Our results for the first half of 2015 demonstrate that we continue to transform our business to higher value and return value to shareholders,” she said. “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."

Due to the sheer size of IBM and the many different business sectors that it is involved in, restructuring to take advantage of new technologies can be a lengthy and costly process. However, the fact that revenue from its cloud services increased 50 per cent when compared with the same period twelve months ago, is promising.

However, the continued decline will still be of some concern to shareholders, with global technology services revenue down by 10 per cent, global business services down 12 per cent and software falling by 10 per cent.

Read more: IBM and Box announce global cloud partnership

IBM was founded more than a century ago and newer, more agile cloud vendors are beginning to undermine its traditional business model. That being said, mainframe technology, which has underpinned the company’s success for many years, continues to prove profitable. The reliance on mainframes in the banking and insurance industries means that the technology still accounts for around 25 per cent of IBM’s revenue and 35 per cent of its profit.

Barclay has been writing about technology for a decade, starting out as a freelancer with IT Pro Portal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.