This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

IBM CEO Sets $7 Billion Cloud Goal

ARMONK, N.Y. ( TheStreet) -- IBM (IBM - Get Report) expects to generate around $7 billion from cloud computing by 2015, according to the tech giant's CEO Sam Palmisano.

Speaking during the company's annual investor meeting, Palmisano explained that IBM is already involved in "thousands" of cloud engagements with customers such as AT&T (T - Get Report). "All cloud is is the next technical shift in the enterprise," he said. "It represents about $7 billion of opportunity for us."

IBM CEO Sam Palmisano

IBM has made a major push into cloud computing, launching its 'Blue Cloud' strategy in 2007, and the growing popularity of cloud services is expected to drive demand for the company's servers, software and services.

Palmisano also used his keynote to reiterate IBM's commitment to deliver earnings per share of at least $20 by 2015. This, he explained, will partly be the result of selling more software.

IBM also expects the revenue contribution from emerging "growth" markets to reach 30% of the firm's geographic sales by 2015, according to a slide shown by the CEO. Previously, IBM had predicted a revenue contribution of 25% from emerging markets, which include India and China.

"GDP over the next five years in these emerging markets will outperform the developed world -- I think that is irrefutable at this point in time," he said. "It's the emergence of the middle class and the per-capita income shifts that are occurring."

Investors responded positively to Palmisano's comments. IBM shares rose $2.39, or 1.49%, to $162.32 on Tuesday, outpacing the modest advance in tech stocks that saw the Nasdaq gain 0.71%,

The tech bellwether, which competes with HP (HPQ - Get Report), Oracle (ORCL - Get Report) and Microsoft (MSFT - Get Report), recently posted strong quarterly and annual results, boosted by increases in mainframe, software and services revenue.

"It was another record year in a tough economic environment," said Palmisano. "It was our seventh year of gross margin expansion."

High-margin offerings such as software and services helped IBM sidestep the worst of the recent recession, and the company expects to almost double its software profit by 2015. The tech bellwether is also looking to return $70 billion in capital to shareholders between 2010 and 2015, according to Palmisano's keynote, as well as adding another $100 billion in fresh cash flow.

--Written by James Rogers in New York.

>To follow the writer on Twitter, go to http://twitter.com/jamesjrogers.

>To submit a news tip, send an email to: tips@thestreet.com

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
HPQ $33.26 0.00%
IBM $169.78 0.00%
MSFT $47.87 0.00%
ORCL $43.08 0.00%
T $34.01 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs