International Business Machines Corporation (IBM) is a globally integrated company that creates sustained value for clients by helping them leverage the power of hybrid cloud and artificial intelligence (AI).
The company’s hybrid cloud platform and AI technology support clients’ digital transformations and helps them reimagine critical workflows, at scale, and modernize applications to increase agility, drive innovation and create operational efficiencies. The company’s offerings draw from lead...
International Business Machines Corporation (IBM) is a globally integrated company that creates sustained value for clients by helping them leverage the power of hybrid cloud and artificial intelligence (AI).
The company’s hybrid cloud platform and AI technology support clients’ digital transformations and helps them reimagine critical workflows, at scale, and modernize applications to increase agility, drive innovation and create operational efficiencies. The company’s offerings draw from leading IBM capabilities in software, consulting services capability to deliver business outcomes, and deep incumbency in mission-critical infrastructure, all bolstered by one of the world’s leading research organizations.
IBM is increasingly applying AI-based technologies, including generative AI, to its services and products, to how it delivers offerings to IBM clients, and to its own internal operations. Additionally, IBM is investing in and offering new products and services associated with AI development, deployment and management.
The company’s customers include numerous governmental entities within and outside the U.S., including the U.S. Federal Government and state and local entities. The company has clients in more than 175 countries. The company’s client base includes many enterprises worldwide, from small and medium businesses to the world’s largest organizations and governments, with a significant portion of the company’s revenue coming from global clients across many sectors.
The company offers its products directly and through a variety of third-party distributors, resellers, independent software vendors, independent service providers, and other ecosystem partners.
The company’s products, services, systems and networks, including cloud-based systems and systems and technologies that the company maintains on behalf of its customers, are used in critical company, customer or third-party operations, and involve the storage, processing and transmission of sensitive data, including valuable intellectual property, other proprietary or confidential data, regulated data, and personal information of employees, customers and others. These products, services, systems and networks are also used by customers in heavily regulated industries, including those in the financial services, healthcare, critical infrastructure and government sectors.
IBM is addressing the hybrid cloud and AI opportunity with a platform-centric approach, focused on providing client value through a combination of technology and business expertise. The company provides integrated solutions and products that leverage: data, information technology, deep expertise in industries and business processes, with trust and security and a broad ecosystem of partners and alliances. The company’s hybrid cloud platform and AI technology and services capabilities support clients’ digital transformations and help them engage with their customers and employees in new ways. These solutions draw from an industry-leading portfolio of capabilities in software, consulting services and a deep incumbency in mission-critical systems, all bolstered by one of the world’s leading research organizations.
Strategic Partnerships
The company proactively partners with a broad variety of companies, including hyperscalers, service providers, global system integrators, and software and hardware vendors. The company works alongside its partners to deliver end-to-end solutions that address the company’s clients’ complex business challenges while accelerating growth. The company’s strategic partners include: Adobe, Amazon Web Services (AWS), Microsoft, Oracle, Palo Alto Networks, Salesforce, Samsung Electronics and SAP, among others.
Business Segments and Competition
Software
The depth, breadth, and innovation of the company’s software offerings, coupled with the company’s global reach, deep industry expertise and research capabilities help differentiate the company’s offerings from the company’s competitors. The company’s hybrid cloud and AI platforms allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The principal competitors in this segment include: Alphabet (Google), Amazon, BMC (BMC Software, Inc.), Broadcom, Informatica, Microsoft, Oracle, Salesforce, SAP and Splunk.
Consulting
Consulting focuses on integrating skills on strategy, experience, technology and operations by domain and industry. Consulting competes in a dynamic market, including consulting, systems integration, application development, application management and business process outsourcing services. The company’s broad-based competitors include Accenture and Capgemini.
Infrastructure
IBM is well positioned in the growing hybrid cloud infrastructure market, providing on-premises and cloud-based server and storage solutions. The company gains advantage and differentiation through investments in higher-value capabilities, including security, scalability, and reliability, designed especially for mission-critical and AI workloads. In addition, the company offers a portfolio of life-cycle services for hybrid cloud infrastructure deployment. The company’s principal competitors include: Dell Technologies, Hewlett-Packard Enterprise (HPE), Intel, NetApp, and Pure Storage.
Financing
Financing provides client and commercial financing, facilitating IBM clients’ acquisition of hardware, software and services. Financing’s ability to manage credit and residual value risk generates a competitive advantage for the company.
Strategy
Over the past 5 years, IBM has shifted to higher growth areas, with approximately 75 percent of the company’s business mix in Software and Consulting. The company’s strategic focus is hybrid cloud and artificial intelligence (AI), today’s most transformative technologies. As clients drive business growth using their existing technology and investing in new ones, they seek flexibility across distributed technology environments and the need to realize value from AI. The company has shaped its business to focus on those client needs.
The company’s strategy aligns with the needs of its clients.
IBM is strategically positioned to help clients unlock their next chapter of technology-led business growth. It will be built across hybrid multi-cloud and leverage AI. With the company’s portfolio of technology and consulting capabilities, the company uniquely helps deliver that growth.
IBM’s Differentiated Portfolio Value
IBM Software makes technology that delivers innovation and productivity with capabilities to enable end-to-end enterprise use cases, client usage, consumption, and expansion. The company delivers this value in four major areas: Transaction Processing, powering IBM Z to deliver unmatched scalability, security, availability and real-time fraud detection for the company’s client’s mission-critical workloads; Automation, boosting application performance and optimizing costs across clients’ technology operations and reducing overall complexity; Data, accelerating productivity by infusing AI at scale into applications and business processes to drive decisions in real-time; Hybrid cloud platform (Red Hat), unifying on-prem, public and private clouds, and the edge to scale applications and AI models across environments. All capabilities support hybrid cloud deployment and have security and AI embedded throughout.
IBM Consulting provides strategy & technology and intelligent operations services to address clients’ most challenging business goals – including how to be more productive, accelerate growth, and drive innovation. The company delivers domain expertise to drive client adoption through the company’s offerings, leveraging hybrid cloud and AI technologies from IBM Software and with strategic partners including AWS, Microsoft, Oracle, SAP, and many others across the ecosystem. IBM Consulting brings speed and scale to innovative solutions that combine industry, domain, and hybrid cloud knowledge together with AI-powered assets, such as IBM Consulting Advantage, a first of its kind AI delivery platform designed to deliver solutions at scale and realize faster time to value, transforming how the company’s consultants work.
IBM Infrastructure enables hybrid cloud environments for mission-critical transactions and AI workloads, while maintaining the highest security and availability. The business is anchored by IBM Z which excels at delivering transaction processing capability with an industry-first integrated on-chip AI accelerator designed for high-speed, latency-optimized inferencing to deliver unmatched throughput, availability, and security. The company’s distributed infrastructure offerings, Power, Storage, and Cloud, accelerate client’s digital transformations while the company’s Infrastructure Support delivers lifecycle services enhanced with AI to optimize hybrid cloud environments.
In support for each business segment, the company’s AI strategy focuses on four key differentiators to help address adoption and challenges: Open, Hybrid and Domain Expertise, which the company delivers across its portfolio. The company enables cheaper inferencing built for hybrid cloud architectures with the company’s Red Hat AI portfolio. The company provides small, open Granite models that deliver better performance at a fraction of the price. The company embeds domain expertise in its models, technologies, and consulting offerings to speed client adoption and value.
IBM Research continues to demonstrate the ability to transition research to market-ready solutions; reinventing how work gets done and building on its legacy of transforming innovation in computing into client-grade solutions. In 2024, the company continued to innovate around hybrid cloud and AI which created new business opportunities for IBM, including Granite 3.0 models and InstructLab. In quantum computing, the company continues to progress along its Quantum Development & Innovation Roadmap, including the release of the Heron quantum chip and launch of Qiskit 1.0 software development kit.
In addition to organic innovation, the company accelerates its strategy and client value with inorganic investments. Areas of focus include hybrid cloud, data, and AI technology along with strategic consulting capabilities. In 2024 IBM closed multiple deals, the most material being the acquisition of assets from Software AG to bolster the company’s automation, data and AI portfolios, and Neural Magic to fuel optimized generative AI innovation across hybrid cloud. Additionally, the company announced its intention to acquire HashiCorp, adding advanced capabilities in hybrid multi-cloud infrastructure automation and orchestration.
Hybrid cloud and AI together have the power to unleash business productivity. IBM can bring hybrid cloud and AI to life for clients through the company’s portfolio across the various business segments. Each of the company’s business segments contribute to and benefit from the hybrid cloud and AI strategy. Clients realize greater value when complementary parts of the portfolio come together. For example, within Consulting, the company has the world’s largest Red Hat practice differentiated with hybrid by design methodologies, with Consulting Advantage used to leverage AI across every stage of the project lifecycle. In IBM Z, watsonx code assistant for Z uses AI to accelerate modernization journeys, delivering more value to clients.
Collaborating to Create Value with Clients and Ecosystem Partners
Building the company’s ecosystem is core to its overall strategy, focusing on helping clients transform their core operations and create new sources of competitive advantage through the application of AI and hybrid cloud technologies. The company’s approach to client engagement allows the company to meet clients where they are. The company brings its next-generation innovations and core platforms to a wide range of clients and partners through the company’s signature THINK event tour and IBM TechXchange conference. The Partner Plus program makes it easy for partners to deepen technical expertise on IBM products, allowing clients more choice on who to partner with. Additionally, the company continues to co-invest with its strategic partners – Adobe, AWS, Microsoft, Oracle, Palo Alto Networks, Salesforce, SAP, ServiceNow – to amplify joint impact for the company’s clients by embedding IBM technology into core platforms that run their businesses.
The company also brings product innovations to clients through use cases, the company’s internal ‘client zero’ productivity proof points, and technical experiences to demonstrate the value of the company’s technology as a source of competitive advantage. For example, the company has resolved 94 percent of low-level HR inquiries with the company’s AskHR assistant, built on watsonx, freeing up HR professionals to focus on more complex issues. Being a client zero exemplar accelerates the company’s product roadmap and commercial success in addition to delivering productivity to the business.
Business Segments and Capabilities
IBM operates in more than 175 countries around the world. The company’s platform-centric hybrid cloud and AI strategy is executed through the company’s operations and consists of four business segments: Software, Consulting, Infrastructure and Financing.
In the first quarter of 2025, the company announced changes to the reported revenue categories within the company’s Software and Consulting reportable segments effective January 1, 2025.
Software
Software provides software solutions that address client needs for a hybrid cloud platform, data and AI, automation, and security on their journey to hybrid cloud. It includes all software, except operating system software reported in the Infrastructure segment.
Software comprises two business areas – Hybrid Platform & Solutions and Transaction Processing, which have the following capabilities:
Hybrid Platform & Solutions: includes software, infused with AI, to help clients operate, manage and optimize their IT resources and business processes within hybrid, multi-cloud environments. It includes the following:
Red Hat: provides enterprise open-source solutions, for hybrid, multi-cloud environments, which includes Red Hat Enterprise Linux (RHEL), OpenShift, the company’s hybrid cloud platform, as well as Ansible.
Automation: optimizes processes from business workflows to IT operations with AI-powered automation. Automation includes software for business automation, IT automation, integration and application runtimes.
Data & AI: accelerates data-driven agendas by infusing AI throughout the enterprise, empowering intelligent decision making. The portfolio includes capabilities that simplify data consumption through data fabric with data management, optimize lifecycle management, and make better predictions through business analytics. Data & AI capabilities facilitate sustainable, resilient businesses and enable intelligent management of enterprise assets and supply chains with environmental intelligence.
Security: creates a risk-aware, secure business by gaining real-time threat insights, orchestrating actions and automating responses across all touchpoints, in line with a zero-trust security strategy. Security includes software for data security, identity and access management, and threat management.
Transaction Processing: supports clients’ mission-critical, on-premise workloads in industries such as banking, airlines and retail. This includes transaction processing software such as Customer Information Control System and storage software, as well as the analytics and integration software running on IBM operating systems such as DB2 and WebSphere running on z/OS.
Consulting
Consulting provides deep domain, technical, and industry expertise and market-leading capabilities in business transformation, technology implementation and managed services, including cloud managed and application services. Consulting designs, builds and operates technology and business processes based on open, hybrid cloud architectures leveraging the power of generative AI, with IBM technology and ecosystem partner technologies. Consulting uses its IBM Garage method and assets deployed through IBM Consulting Advantage to convene experts to co-create solutions with clients to accelerate their digital transformations through AI and automation.
Consulting comprises three business areas – Business Transformation, Technology Consulting and Application Operations, which have the following capabilities:
Business Transformation: provides strategy, process design, system implementation and operations services to improve and transform key experiences and business processes. These services deploy AI and automation in business processes to exploit the value of data and include an ecosystem of partners alongside IBM technology, including strategic partnerships with Adobe, Oracle, Salesforce and SAP, among others.
Technology Consulting: helps clients architect and implement solutions securely across cloud platforms, including Amazon, Microsoft, Palo Alto Networks, and IBM, and deploy strategies to transform the enterprise experience and enable innovation, including data transformation for AI with watsonx and application modernization for hybrid cloud with Red Hat OpenShift.
Application Operations: focuses on managing, optimizing, orchestrating, and securing custom application and ISV packages for clients. Services include application management, platform engineering, and security services across hybrid cloud environments.
Infrastructure
Infrastructure provides trusted and secure solutions for hybrid cloud and is optimized for infusing AI into mission-critical transactions.
Infrastructure comprises two business areas – Hybrid Infrastructure and Infrastructure Support, which have the following capabilities:
Hybrid Infrastructure: provides clients with innovative infrastructure platforms to help meet the new requirements of hybrid multi-cloud and enterprise AI workloads leveraging flexible and as-a-service consumption models. Hybrid Infrastructure includes IBM Z and Distributed Infrastructure.
IBM Z: the premier transaction processing platform with leading security, resilience and scale, highly optimized for mission-critical, high-volume transaction workloads and enabled for enterprise AI and hybrid cloud. It includes IBM Z and LinuxONE, with a range of high-performance systems designed to address enterprise computing capacity, security and performance needs, z/OS, a security-rich, high-performance enterprise operating system, as well as Linux and other operating systems.
Distributed Infrastructure: includes Power, Storage and IBM Cloud Infrastructure-as-a-Service (IaaS). Power consists of high-performance servers, designed and engineered for data intensive and AI-enabled workloads and optimized for hybrid cloud and Linux. The Storage portfolio consists of a broad range of storage hardware and software-defined offerings, including Z-attach and distributed flash, tape solutions, software-defined storage controllers, data protection software and network-attach storage. IBM Cloud IaaS is built on enterprise-grade hardware with leading security and compliance capabilities and offers flexible computing options across architectures to meet client workload needs.
Infrastructure Support: delivers comprehensive, proactive and AI-enabled maintenance and support services to maintain and improve the availability and value of clients’ IT infrastructure (hardware and software) both on-premises and in the cloud, including maintenance for IBM products and other technology products.
Financing
Financing facilitates IBM clients’ acquisition of hardware, software and services through its financing solutions. The financing arrangements are predominantly for products or services that are critical to the end users’ business operations and support IBM’s hybrid cloud and AI strategy. Financing conducts a comprehensive credit evaluation of its clients prior to extending financing. As a captive financier, Financing has the benefit of both deep knowledge of its client base and a clear insight into the products and services financed. These factors allow the business to effectively manage two of the primary risks associated with financing, credit and residual value, while generating strong returns on equity.
Financing comprises the following two business areas – Client Financing and Commercial Financing:
Client Financing: lease, installment payment plan and loan financing to end-user clients for terms generally up to seven years. Assets financed are primarily new and used IBM hardware, software and services.
Commercial Financing: short-term working capital financing to business partners and distributors primarily of IBM products and services. The company has an existing agreement with a third-party investor to sell IBM short-term commercial financing receivables on a revolving basis. Refer to note K, ‘Financing Receivables,’ for additional information.
History
The company was founded in 1911. It was incorporated in the state of New York in 1911. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924.
