IBM, like mega-cap tech companies Microsoft, Oracle and SAP, is slowly shifting from the old to the new, as businesses demand the efficiency, speed and advanced analytics that come with collecting their data in the cloud.
For IBM, this is mostly happening through acquisitions. Since the beginning of 2011, IBM has bought at least 40 companies, including retail analytics provider DemandTec, cloud infrastructure vendor SoftLayer, cloud marketing platform Silverpop and just last month StrongLoop for mobile application development.
Cloud revenue at IBM reached $9.4 billion in the past year, representing 11 percent of total sales. IBM said that within the cloud business, it's on pace to generate $4.5 billion of annual "as-a-service" revenue, up from $3.1 billion a year earlier.
Still, investors haven't had much to get excited about, with IBM reporting quarterly revenue last week that missed even the most pessimistic estimates and its forecast also coming in below expectations.
Accounting issues are just adding to the pain.