Many prefer to work in multinational companies over startup. There are several reasons such as a financially strong, working environment, popular clients and much more. MNCs are those organisations which are based in distinct parts of the country for company expansion. If you’re working in a startup switching to MNC will improve your career growth. Also, getting a job at MNC will make you feel secure. Among all the companies, IBM is one of the most popular businesses in the world.
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Introduction to IBM
IBM stands for “International Business Machines”
IBM is popularly known as a global technology company. It provides excellent hardware and software services. Currently, IBM is extending its services and expanding its business through cloud-based services.
The company was established in 1911 by Charles Ranlett Flint. At first IBM was called a “Computing-Tabulating-Recording Company”. After 1924 they renamed it as IBM. The company is more than 100 years old. Also, it’s said that the organization had to adjust to multiple technological trends from the past. IBM is giving new wings for its customers by offering cloud and data-driven technology.
IBM revolves around different technologies such as cloud computing, computer software, artificial intelligence, computer hardware and a lot more.
In this post, let’s discuss IBM’s business model and how the company is making money. No more delay any further, let’s get started…
IBM business model
IBM is one of the leading brands when you discuss top tech companies that existed across the globe. Since there are multiple services provided by the company, the revenue is also increasing year by year.
The company is the go-to platform for many. As IBM is providing various capabilities, it’s offering an integrated platform and excellent solutions to its clients from the origin of the company. As mentioned earlier, IBM is offering excellent services and solutions to the client, this is making IBM as reliable and dependable. Currently, there are over 175 IBM branches located around the world. There are more than 400,000 people who are working for IBM.
Key activities of IBM business model
IBM business model is mostly involved in two major business activities such as
- Research and development
- Operations
Now, you’re aware of the IBM business activities, the next thing you should know about what are the business segments that help IBM to channelize, there are five types such as
- Global Technology Services (GTS)
- Software
- Global Business Services (GBS)
- Global Financing
- Hardware Services
- Cloud & Cognitive Software
- Systems
Let’s discuss these business segments and understand their roles and responsibilities in IBM business model
Global technology services
A large business will ensure that there are several financial services. Therefore, IBM is also providing various services from different industries such as healthcare, technology, retail, telecommunication and more. Also, IBM is having outstanding IT infrastructure, this could be the key reason for the company to serve the clients and customers to provide good results.
Also, IBM is using a few services like outsourcing, technology support, integrated technology and other services. These are a few excellent things that are offered by IBM to its customers and earning good revenue.
Software services
Good news for the one who is looking for software assistance. IBM is offering an exciting software service. The company is offering the best operating system with middleware. Sounds amazing right!!! Here the middleware service offers software layers. These are used to connect all the devices that are available in the company. Also, IBM provides support for the people who are looking for software related solutions.
The popular software service introduced by IBM is “Watson”. This is a top-rated cognitive computing solution that is available for commercial use. The software has extraordinary features. The software can interact in natural language and processes big data.
There are few key software introduced by IBM are
- WebSphere
- Information Management
- Rational
- Mobile
- Tivoli
- Social Workforce
Global business services
As mentioned earlier, IBM is offering its service around the world. These amazing services which are offered globally are considered as an advantage for the company to grow. While discussing IBM services, there is no surprise consulting and system integration are included in it. On the other hand, there are other services offered in the IBM business model that are helping to generate good profits for the organization.
Let’s discuss consulting and application management services offered by IBM
IBM consulting includes amazing services such as expertise on business strategy, finance, marketing, technology, operation and supply chain.
Application management services include application management, maintenance, support services for packaged software, custom and legacy application.
Global financing
While discussing financing options in a flexible manner, IBM business model is the perfect option. IBM offers a financing solution around the globe. It includes a lease, instalment payment solutions, etc. The loan financing option is the best way to earn good profits for IBM.
The company is offering three major services such as client financing, remarketing and commercial financing. These are the key reasons that many people have to opt for IBM. The company has earned $265 million through global financing.
Hardware services
So far, we have discussed software services offered by IBM. On the other hand, IBM is offering excellent hardware services that are included in their business model. The company is helping people who are looking for hardware issues. These hardware services provide excellent solutions in the best way.
IBM offers a storage solution on clients servers. Also, the company is providing a few installation services for their clients. While installation, there might be complications involved, IBM support team will help during installation while deploying the hardware products. Hardware services provided by IBM are generating good revenue for the business.
The company offers technologies for data centres, data storage, packaging solutions and semiconductor technology.
Hardware service of IBM business model is responsible for offering a few key solutions that are related to microelectronics, system X, system Z, flash storage and power systems.
Cloud & cognitive Software
This is one of the popular services offered by IBM. The cloud and cognitive software work in an effective way as they deliver integrated and secure cloud to the people. On the other hand, it offers data and AI solutions for them. Over 32% of IBM’s net revenue is generated through this segment.
Systems
System segments offer high-standard infrastructure platforms in order to meet new requirements of enterprise artificial workloads and hybrid multi-cloud. Here the system offers advanced semiconductor and excellent system technologies to its customers. IBM has earned more than $1.9 billion in 2020 through systems.
How does IBM make money?
While discussing IBM business segment, you’ve come to know how these services are helping people and good income for the company. IBM has generated more than $35.7 billion until June 30, 2020.
The above-mentioned business segment of IBM is the foremost player behind generating good revenue.
Let’s give a glance look at how much amount of money does IBM earn money from its segments
- Global Technology Services is responsible for earning over 1/3rd of IBM revenue.
- Global Business Services helps to generate over 18% of revenue in 2020.
- Software services allow the business to generate over 1/4th of net revenue.
- Hardware service has earned upto 15% of the net profit in 2020.
- Global Financial assists the organization is generating $265 million of revenue.
- System segment has earned over $1.9 billion in revenue.
- More than 32% of IBM net profits are generated from the cloud and cognitive software.
The key sources of revenue of IBM business model include hardware sales, annual outsourcing, SaaS, installation, maintenance and more.
Conclusion
Many people dream to work in multinational companies. Among all the MNC, IBM is the favourite place for many of them. As there are multiple opportunities available at IBM. Many people want to know the secret of how IBM is earning money. Hope this article has provided you with the right answer. The article has mentioned and detailed outline regarding IBM business model and how the company is generating good income. Being an established and top technology company in the globe, IBM business model is pretty inspiring for the one who is looking for better ways to make money in this field. IBM has earned $35.7 billion until June 30, 2020.
