IBM India Revenue Drops 2% In 2018-19

IBM India’s revenue dropped 2% to Rs 27,279 crore ($3.8 billion) in 2018-19, compared to the year before, a reflection perhaps of the weakness in its legacy business even as it accelerates its shift to the cloud. Its net profit dropped 12% to Rs 2,426 crore, from Rs 2,754 crore, showed data from business intelligence platform Tofler.

Though IBM’s Q3 revenue globally fell 3.9% to $18 billion, its revenue from cloud rose 14% to $5 billion. The company’s revenue has been dropping for several years now. It is seen to be putting a lot of hope in its recent acquisition of RedHat. The $34 billion buyout is expected to help modernise application for the hybrid cloud.

IBM in India has four primary business segments — hardware, software, services, and intercompany services and sales. It has six subsidiaries – Sterling Commerce Solutions India, IBM Business Consulting Services, Ravy Technologies, Sanovi Technologies, Truven Health Analytics India, and Sanovi Technologies Dubai. Sanovi
Technologies clocked revenue of Rs 181 crore last year, and omni-channel solutions provider Sterling Commerce Solutions did Rs 149 crore.

Hansa Iyengar, analyst in London-based Ovum Research, said IBM’s current quarter revenues are still being impacted by the accounting for the Red Hat acquisition. “Its legacy revenues continue to eat into margins despite the cloud business performing well,” she said.

Phil Fersht, CEO of US-based HfS Research, said, “IBM continues to lose market share to its Indian competition and Accenture. “It has lost its lustre as a premium brand in India and needs to revitalise its culture.”

IBM India spokeperson said, “In FY2019, IBM India made significant progress in the strategic Cloud and Cognitive business with strong double digit revenue growth and a focus on the high-value areas of data, AI, cloud, security and digital.”―Times of India