IBM cloud business probed by SEC

Big Blue reveals it is co-operating with investigation into how it reports cloud services revenue

IBM has revealed it is facing a probe into the way it reports cloud revenue by the US Securities and Exchange Commission.

In its Q2 10-Q form, Big Blue announced it was co-operating with the investigation, which it learned about in May, although made no further comment.

IBM sees cloud computing as a major growth area, in 2011 projecting that cloud services would be a $7bn (£4.6bn) business for the firm by 2015.

In July, it bolstered its cloud business by closing its acquisition of SoftLayer, which it bills as the world's largest privately held cloud computing infrastructure provider, and claims its cloud revenue rose by 70 per cent in the first half of its fiscal 2013.

IBM's shares fell by more than one per cent following the news.

The hardware and services goliath saw Q2 net profit fall by 16.9 per cent to $3.23bn as it absorbed a $1bn hit relating to "workforce rebalancing" during the quarter. Sales fell 3.3 per cent to $24.92bn.