Two years into the massive overhaul of IBM by CEO Arvind Krishna, the company’s steadily accelerating cloud business is now getting big contributions from IBM Consulting, which reported 29% hybrid-cloud growth for Q2.
To understand what kinds of customer needs and demands are driving that impressive level of cloud growth, I sat down recently over a Zoom call with IBM Consulting Senior VP John Granger. IBM Consulting’s overall Q2 revenue grew 10%, or 18% in constant currency.
You can see the full interview with Granger below, but here are some of the highlights:
- “We think about how our clients are going to take advantage of the pre-eminent technology of our time, which is cloud, and then we are very clear that those clients are not going to be able to just make a simple hop to public cloud.”
- “For reasons of data security, for reasons of data gravity, for reasons of cost and complexity in terms of the applications that support their mission-critical operations, the best outcome is going to be a hybrid-cloud platform: a single integrated fabric that allows them to run applications in traditional on-prem environments, private cloud, and then multiple public clouds.”
- “We’ve always had a very big focus on industry, and that’s what differentiates us as IBM Consulting from some of our competition, and by and large we go to market by industry.”
- On IBM’s deep and highly strategic new partnerships with Microsoft Azure, AWS, and Google Cloud: “But clearly, it’ll kill us in the marketplace if we’re just seen as a sales channel for IBM technology.”
- “We do distinguish ourselves and differentiate ourselves from quite a lot of our competition in terms of the scale of work that we can do. We’ve done massive SAP implementations for big oil companies, for CPG companies, financial services, and they’re looking to us because they know that we’ve got the geographical breadth as well as depth of skills.”
For context, the hybrid-cloud unit is the fastest-growing segment within IBM Consulting with a Q2 rate of 20% or 29% in constant currency, followed by technology consulting, up 14% or 23% in constant currency; applications operations, up 9% and 17%; and business transformation, up 9% and 16%.
No other company in the Cloud Wars Top 10 has a consulting business anywhere close to the size of IBM’s. If Granger and his team can continue to deliver to customers the unique types of insight and value he describes above, I would bet that IBM Consulting will continue to be a major contributor to IBM’s accelerating cloud business for years to come.