International Business Machines Corporation develops enterprise technology across software, consulting, hardware, hybrid cloud, artificial intelligence and quantum computing. News from IBM centers on AI platforms and services, including watsonx, IBM Enterprise Advantage, IBM Consulting Advantage, IBM Sovereign Core, watsonx Orchestrate and Red Hat technologies for hybrid and regulated environments.
Recurring updates also cover IBM Consulting client work, industry and cloud collaborations, research milestones in quantum-centric supercomputing, AI-enabled application experiences, and IBM Institute for Business Value studies on enterprise adoption and governance of AI.
According to a new global consumer study by IBM, respondents are showing increased optimism for the 2021 holiday season compared to 2020, with a 30% year-over-year increase in holiday shopping budgets. However, concerns about COVID-19 persist, with 75% of respondents worried about new variants. Holiday shopping budgets remain 13% lower than 2019 levels. A notable shift towards online shopping continues, with 43% planning to shop online versus 36% in physical stores. Additionally, travel budgets are rebounding, increasing 43% year-over-year, indicating a potential recovery in holiday travel spending.
IBM reported a third-quarter revenue of $17.6 billion, a 0.3% increase year-over-year. Adjusted for divestitures and currency, revenue fell by 0.2%. Key segments showed growth: Cloud & Cognitive Software grew 3%, while Global Business Services jumped 12%. Adjusted free cash flow reached $11.1 billion. However, net income decreased by 19% year-over-year to $3.4 billion, impacted by Kyndryl separation costs. The company reduced debt by $7 billion since 2020, reflecting a stronger balance sheet.
IBM announced plans to acquire the Adobe Workfront consulting unit from Rego Consulting to strengthen its hybrid cloud and AI strategy. This acquisition marks IBM's 17th overall and 9th in cloud and AI services since April 2020. The Adobe Workfront unit enhances IBM's offerings in work management, aiming to improve client efficiency and digital transformation capabilities. The deal allows IBM to deliver integrated services that connect marketing, sales, and support efforts for enterprise clients, although financial details remain undisclosed.
Kyndryl, formed from IBM's Managed Infrastructure Services business, will hold a virtual Investor Day on October 19, 2021, at 1 p.m. EDT. The event will feature discussions on Kyndryl's core practices, addressable market, financial performance, and strategies for growth, culminating in a Q&A with senior executives including CEO Martin Schroeter, Group President Elly Keinan, and CFO David Wyshner. Interested parties can access the webcast and related materials via Kyndryl's investor relations website. A replay will be available for 90 days post-event.
IBM has partnered with Brmaja Commercial Company to assist Virgin Megastore KSA in migrating its SAP ERP workloads to IBM Cloud. This shift is part of a hybrid cloud strategy aimed at enhancing operational efficiencies amid rising consumer digital engagement expectations post-COVID-19. The move is expected to boost productivity and streamline operations, allowing the retailer to adapt quickly to market demands. Through this collaboration, Virgin Megastore aims to innovate and enhance both customer and employee experiences in a secure environment.
IBM announced a major initiative to provide 30 million people worldwide with skills for future job opportunities by 2030. This plan includes over 170 new partnerships with academic institutions and industry leaders to enhance access to education in technology fields. CEO Arvind Krishna emphasized the importance of democratizing skills to fill the growing global skills gap, which could add US$11.5 trillion to global GDP by 2028. The initiative features diverse programs aimed at underserved communities, including internships, mentorships, and no-cost online courses.
On October 12, 2021, Apptio and IBM announced a collaboration to enhance decision-making for hybrid cloud technology. This partnership aims to boost the adoption of IBM's open hybrid cloud and Red Hat OpenShift. By leveraging data-driven insights from Apptio, clients can better assess migration and application strategies. IBM will provide consulting services to aid clients using Apptio’s products for managing cloud resources. This collaboration emphasizes the need for enterprises to optimize their technology investments in a hybrid environment, catering to both on-premises and cloud needs.
IBM has announced the separation of its managed infrastructure services business, Kyndryl, approved by its board. Shareholders will receive 80.1% of Kyndryl's shares, with a distribution date set for November 3, 2021. For every five shares of IBM, shareholders will receive one Kyndryl share, with the record date on October 25, 2021. After the separation, IBM will retain 19.9% of Kyndryl shares, which may be exchanged for IBM debt within a year.
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IBM and Raytheon Technologies have announced a strategic collaboration to develop artificial intelligence, cryptographic, and quantum solutions tailored for the aerospace, defense, and intelligence sectors. This partnership aims to enhance system design, secure communication networks, and improve decision-making processes. The collaboration combines IBM's innovations with Raytheon's aerospace expertise, addressing critical challenges in cybersecurity as quantum technologies evolve. A dedicated team will accelerate the integration of IBM's technologies into active programs and identify long-term solutions.