IBM 2014 Annual Report Download - page 4
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Continuing to move to higher value
Information technology is one of the most dynamic, fast-
changing and fiercely competitive industries in the world,
characterized by relentless cycles of innovation and
commoditization. Our choice is clear: We pursue a model
of high-value innovation, rather than commodity technology,
products and services. Our commitment to this model
compels us to reinvent businesses continually; grow new
ones organically and through acquisitions; and occasionally
divest businesses that do not fit our profile.
You see all of this reflected in our 2014 results — a dynamic
shift of our portfolio underneath our $92.8 billion in revenue,
$21 billion in operating pre-tax income and operating
earnings per share of $16.53 from continuing operations.
Consider that we completed or announced the divestiture
of three businesses in 2014 that a year earlier drove
$7 billion in revenue, but lost about $500 million in profit —
what I call “empty calories.” At the same time, we are
making significant investments in line with the strategy
I described to you last year.
Throughout the year you saw the bold moves we made:
• $1 billion to accelerate the commercialization of IBM
Watson, bringing cognitive computing to more clients
and partners in more industries.
• $1.2 billion to expand our SoftLayer cloud centers around
the world. We expect to have 46 locations by the end
of 2015.
• $1 billion to create IBM Bluemix, our cloud platform-as-
a-service for software developers.
• Further scaling our global IBM Cloud business through
partnerships with SAP and Tencent.
2014
$92.8 billion
Revenue
$21 billon
Operating pre-tax
income
$16.53
Operating EPS
3A Letter from the Chairman