IBM boss: We are not exiting the hardware market
Chief executive Rometty admits the firm did not meet expectations in 2013
IBM boss Ginny Rometty has said the firm's x86 server business sale does not signal a future hardware market exit as she admitted the company failed to live up to expectations last year.
In a letter to investors – part of IBM's 2013 Annual Report – Rometty (pictured) insisted that hardware would continue to play a big part in the company's future despite its strong focus on big data, cloud and mobile technology.
She said data was IBM's number-one priority for the coming years and claimed that two thirds of IBM's Research arm is now devoted purely to data and analytics.
"Taken together, our investments in data and analytics are driving significant growth, with 40,000 service engagements to date, growing by double digits," she said. "In 2013 our business analytics revenue rose nine per cent – led by Global Business Services and Software. This is already a nearly $16bn (£9.56bn) business for us."
But Rometty admitted that despite the positive steps IBM is taking in new tech, last year it failed to live up to expectations.
"We must acknowledge that while 2013 was an important year of transformation, our performance did not meet our expectations," she said. "Our operating pre-tax income was down eight per cent. Our revenue in 2013, at $99.8bn, was down five per cent as reported and two per cent at constant currency."
In order to do better this year, Rometty said IBM has two key issues to overcome: addressing the world's growth markets – which she said is an attractive opportunity for the firm – and overhauling its hardware business so it can capitalise on new technology.
But she insisted its recent x86 server business sale to Lenovo does not signal the end for the division.
"This divestiture is consistent with our continuing strategy of exiting lower-margin businesses, such as PCs, hard disk drives and retail store solutions," she said. "But let me be clear: we are not exiting hardware.
"IBM will remain a leader in high-performance and high-end systems, storage and cognitive computing, and we will continue to invest in R&D for advanced semiconductor technology."