IBM Changes Reporting Segments in a Move Toward Transparencyby
IBM is reorganizing its segments and said it will reveal more information about its newer businesses in an effort to be more transparent with the progress of the company’s transformation.
Going forward, International Business Machines Corp. will disclose revenue data for its strategic imperatives -- the newer operations it has been investing in -- and its cloud service within the new segments, Chief Financial Officer Martin Schroeter said at an investor meeting Thursday. The Armonk, New York-based company will continue to report total sales from software and strategic imperatives, he said. In a filing, IBM also provided financial details as if these new segments had been in place in 2015.
This is the first time that IBM has disclosed the details of how its newer businesses fit into its financial segments, a move analysts and investors have clamored for in order to better evaluate the company’s efforts. Chief Executive Officer Ginni Rometty has been working for the past few years to turn IBM into a seller of cloud and analytics software and services while managing the decline of more traditional operations.
“We’re putting the puzzle together around the things we’ve invested in,” Schroeter said at the meeting. “We want to make sure that you can track our progress as we transform the business, that you can see the results in the investments we’re making and you can see the kinds of businesses we’re building.”
Under the reorganization, the segments will be cognitive solutions, global business services, technology services and cloud platforms, systems, and global financing. The biggest share of revenue from strategic imperatives in 2015 -- at $11 billion -- came from cognitive solutions, which composes of the bulk of the software offerings, including all sales from Watson, the company’s collection of artificial-intelligence technologies.