This Day On The Street
Continue to site
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 Rometty Reaches for the Cloud

NEW YORK ( TheStreet) --  IBM (IBM - Get Report) is trying to convince investors to forget its past failures by focusing on its future in cloud computing.

CEO Virginia M. Rometty said in an interview with The New York Times that appeared on Monday that although growth has been stagnant during the past few years, "she and the company now had a clear vision for how to pursue another generation of growth."

"We are transforming this company for the next decade," she told the paper, a theme she plans to use on Wednesday at the company's yearly meeting with investment analysts. "That is not a one-year job, not when you're a hundred billion-dollar company."

The challenge IBM CEOs have had to face over the years is how to navigate the 100-year-old company through the ever-changing technological world as older businesses erode.

Must Read: Hillshire Snags Pinnacle Off the Shelf

In recent years, the company has divested its less profitable businesses, such as in January when it announced it was selling its server computers division to China's Lenovo Group (LNVGY) for $2.3 billion.

Meanwhile, IBM has been making major commitments to cloud technology, which allows processing and software delivery remotely over the Internet. Last June, it bought a fast-growing cloud-computing start-up, SoftLayer Technologies, for $2 billion.

IBM also invested $1.2 billion in cloud data centers in January, stating that it had a goal of having 40 cloud-dedicated centers in 15 countries by the end of 2014.

The cloud market has plenty of competition. Amazon (AMZN), Microsoft (MSFT), Google (GOOG) and Salesforce (CRM) are all investing in cloud technologies, hoping to gain large market share early and force out lagging companies.

Analysts say IBM's biggest competition is Amazon Web Services, which has been efficient in delivering a large number of services to customers remotely from Amazon's data centers

Rometty insists that the future for IBM relies on helping customers find insight in today's flood of digital data. If IBM's investments work out, cloud-style computing could drive the company's revenue and its share price for years to come.

IBM Chart
IBM data by YCharts

>>Read More: How to Buy a Piece of Apple or Coke at a Fraction of the Price

At the time of publication, the author had no position in any of the funds mentioned.

Follow @macroinsights

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
IBM $145.94 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs