IBM today is moving the code that underlies its WebSphere Liberty solution for development using Agile and DevOps methodologies to GitHub, where it will be available this week under the Eclipse Public License v1.
The Open Liberty project is working to create a new runtime for Java microservices that can be moved between different cloud environments, according to Ian Robinson, an IBM distinguished engineer and the chief architect of WebSphere. Open Liberty will be the basis the IBM’s continued development of its Liberty product – the codebase is the same — and will be fully supported in commercial WebSphere licenses. It can be downloaded at openliberty.io.
The Open Liberty code on GitHub will supply developments the components they need to create Java applications and microservices, using the Java EE foundation from WebSphere Liberty and the work from the Eclipse MicroProfile community. MicroProfile defines common APIs and infrastructure to microservices applications can be created and deployed without vendor lock-in, Robinson wrote in his blog.
Along with being a founding member of the Eclipse MicroProfile project, IBM has collaborated with Google and Lyft on the Istio project to create an open service fabric for microservices integration and management, and would like to see MicroProfile integrate with Istio, Robinson said.
Further, IBM’s commitment to open source includes the contribution of IBM’s Java 9 VM to Eclipse as Eclipse OpenJ9, which – when combined with Open Liberty, Eclipse MicroProfile and Java EE at Eclipse – creates a fully open licensing model of a full Java stack for building, testing, running and scaling Java applications.
“We hope Open Liberty will help more developers turn their ideas into full-fledged, enterprise ready apps,” Robinson wrote in his blog. “We also hope it will broaden the WebSphere family to include more ideas and innovations to benefit the broader Java community of developers at organizations big and small.”
For artists, technologists, engineers, advertisers and dreamers, augmented reality (AR) is the holy grail of digital experience. This tech promises to make magic real: to manifest whatever we can imagine in physical space.
But we're not there yet. Today, most of what is called AR is not worthy of the name. Rather than being an augmentation of reality, it is a poor facsimile of a powerful idea.
So much more is possible.
In the past few weeks, the world has woken up to the boundless potential of AR to transform how we live, learn, work and interact. Apple's CEO Tim Cook says we will end up wondering how we ever lived without it.
But as we take the first steps into this bright future, it is more critical than ever that we wake up to a fundamental truth: No matter how vivid our digital creations, AR will fall short of its full promise unless and until these can be accurately placed in the real world and, more importantly, fully shareable with others.
Imagination is hard-wired into the human psyche. From early childhood, we embellish our outer worlds with elements of our inner lives. But since there is no way for those around us to tap into those private imaginings, they remain wholly subjective and unverifiable.
Whether or not a sensory experience is shared by others has a critical impact on whether we ourselves believe it to be real. If you are the only one in a crowded room to hear a whispering voice, you will feel isolated and strange. You may start to question your own perception — perhaps even your sanity.
But if others around you say they've heard it too, you're back on solid ground. What you've experienced is valid and therefore must be real.
This is what is known as intersubjectivity, the process of sharing knowledge and experiences with others.
Today, the vast majority of AR tech does not support intersubjective experiences. Indeed, it is often little more than gimmicky filters on our solitary devices that are difficult to share.
If I conjure up a fire-breathing dragon in my back garden, there is no way for me to photograph myself with it or to impress you with the breadth of its wingspan. And if I can't share the magic, it becomes no more satisfying than watching a YouTube video that can't be shared or scrolling through Facebook alone.
And while AR does have the potential to work real magic — to port the products of our imaginations into the physical world — the examples we have access to today are often no more remarkable than the artificial backgrounds on Zoom.
If we want AR to enable a true augmentation of reality, we need to use tech that supports shared digital experiences in the physical world.
Given AR's potential to transform everything from how we train fighter pilots to how doctors collaborate on cases, it is crucial that we address the issue of shared AR now or important interactive experiences will not be possible.
The answer is surprisingly simple. It all boils down to precise positioning.
Many assume that objects and environments that exist in AR are automatically anchored in a fixed location and that it should be easy for multiple people to experience the same things in the same places. The truth is this is never the case.
There are apps that offer rough estimates of where AR objects are placed in physical spaces but these are nowhere near accurate enough. You and your friend may be viewing the same AR unicorn in all its sparkling detail. But while your device may show it standing solidly by the door, hers may show it floating near the ceiling.
When positioning fidelity is this low, intersubjectivity simply isn't possible. While you may be together, your experience cannot meaningfully be described as a shared reality.
This shortcoming becomes particularly jarring when you and a friend or colleague try to engage in a shared physical activity involving digital equipment. Virtual tennis is an impossibility when the ball is in one place for you and somewhere else for your opponent. The same goes for racing digital cars. The list goes on.
The reason it's been so difficult to position AR objects in physical space until now is that our mobile devices don't share a consistent, precise coordinate system.
It's true that smartphones come equipped with GPS, which does make it possible to establish shared geographical parameters to some degree. But for a host of reasons, GPS is far from exact enough for true intersubjectivity.
GPS may be able to establish that an AR object is in a given house, but not whether it is in the bedroom or bathroom. Never mind whether it is sitting on top of a table or under it.
The logical solution to this would be a more precise version of GPS. That, however, would mean a system that is completely unaffected by those factors that hinder GPS fidelity, which range from signal blockage by physical obstacles to poor weather or even solar storms. Smartphone GPS is usually accurate to within a 4.9-meter radius, but only under a clear sky and away from buildings, bridges and trees.
The near-term fix for AR's location problem is much simpler, and billions of dollars less expensive. Rather than spending years on creating a hyper-accurate coordinate system, we should move away from geographical anchors altogether.
Instead of two devices trying to pinpoint their respective locations on a map, they merely need to establish where they are relative to one another. In other words, rather than relying on a fixed set of coordinates, devices should be equipped with technology that can create shared, one-off coordinate systems on an as-needed basis.
Say you and I want to race our digital Ferraris along a beach. With this technology, all we'd need to do is synchronize our devices so they "agree" on their relative positions. Once they have an accurate sense of where they are in an ephemeral space, shared reality is possible.
The larger-scale, more complex AR environments I foresee in the future may well one day require a universal 3D positioning system that uses powerful consensus algorithms and persistent location anchors.
But for today's augmented reality to be more than a buzzword, we need to focus on precise positioning and the technologies we can use right now to precisely share location and invite others into our enhanced reality. With these tools, we can transform AR from a gimmick into a technology that enhances all of our lives.
(Johannes Davidsson is the Head Of Business Development at Auki Labs, an AR tech company creating a decentralized protocol for collaborative spatial computing.)
In this piece, we will take a look at the 11 best virtual reality stocks to buy. For more stocks, head on over to 5 Best Virtual Reality Stocks to Buy.
Advances in semiconductor fabrication and manufacturing have enabled chip makers to squeeze unthinkable amounts of computing power into pieces of silicon the size of a human thumbnail. This growth has also spurred industries of its own, and one such sector is the virtual reality segment of the broader technology industry.
Virtual reality, as the name suggests, refers to technologies that create an artificial representation of reality for users to immerse themselves into - whether for entertainment or productivity needs. This is achieved through headsets, processors, and software, with different companies providing different technologies for the processes.
The virtual reality industry was estimated to be worth $4.4 billion in 2020, and through a massive compounded annual growth rate (CAGR) of 44.8%, the segment can be worth a whopping $84 billion in 2029, according to a research report from Fortune Business Insights. Driving this growth will be several factors, such as the demand for virtual training platforms in industries, that let firms prepare their employees for complex tasks without investing in physical infrastructure. This allows companies in industries such as automobile manufacturing to reduce worker injuries and conduct factory personnel training safely.
Another research report, this time from Valuates Report, analyzes both the virtual and augmented reality markets. Augment reality is a subset of virtual reality that serves as a 'bolt on' to existing reality instead of rendering a completely new environment. This research firm believes that the markets were worth $14 billion in 2020 and through a strong CAGR of 41%, they will grow to sit at $454 billion by the end of 2030.
Therefore, looking at these estimates, it's clear that virtual reality has a bright future ahead of it, despite the bloodbath in technology stocks this year. Today's piece will look at the key players in the industry and some well known firms in the list are Advanced Micro Devices, Inc. (NASDAQ:AMD), Meta Platforms, Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT).
Photo by mahdis mousavi on Unsplash
We took a look at the virtual reality industry and current trends to pick out which firms are currently offering creative products and services in the industry. We preferred companies with strong financial performance, technological advantages, and relevance to current industry dynamics. These stocks are ranked via hedge fund sentiment gathered through Insider Monkey's 895 fund survey for this year's second quarter.
Number of Hedge Fund Holders: 2
Tencent Holdings Limited (OTCMKTS:TCEHY) is a Chinese conglomerate that owns several companies including the video game developer Epic Games. The firm is headquartered in Shenzhen, the People's Republic of China.
Epic Games is one of the most well known game developers in the world, which rose to fame due to its Fortnite gaming brand. The company, like other game developers, is also targeting the metaverse industry which is seeing strong interest from large firms. Sony and The Lego Group invested a whopping $2 billion in Epic Games in 2022 to spur metaverse development.
Additionally, Epic Games' Unreal Engine, which is used by video game developers to develop their products, is capable of developing assets that support 3D visualization and augmented and virtual realities. Insider Monkey's Q2 2022 survey of 895 hedge funds revealed that two had invested in Tencent Holdings Limited (OTCMKTS:TCEHY).
Along with Meta Platforms, Inc. (NASDAQ:META), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Microsoft Corporation (NASDAQ:MSFT), Tencent Holdings Limited (OTCMKTS:TCEHY) is a top virtual reality stock.
Number of Hedge Fund Holders: 4
MicroVision, Inc. (NASDAQ:MVIS) is an American company that develops sensors used in automobiles. Additionally, it also develops a scanning technology that enables the creation of large images for a full field of view. It also develops displays concepts, designs, and modules that are used in augmented and virtual reality headsets. The firm is headquartered in Redmond, Washington.
MicroVision, Inc. (NASDAQ:MVIS)'s lidar systems scored a big win in September 2022, when chip giant NVIDIA Corporation announced that the MAIN DR dynamic view system would be supported by NVIDIA's Drive AGX platform. This will Strengthen highway safety for vehicles.
By the end of its second fiscal quarter, MicroVision, Inc. (NASDAQ:MVIS) had $93 million in cash, which is important given the company's weak operating income profile. The firm has invested some of this into treasury securities, and its latest quarterly operating costs stood at $9.7 million - giving it plenty of runway room. Four out of the 895 hedge funds polled by Insider Monkey for their June quarter of 2022 portfolios had invested in the company.
MicroVision, Inc. (NASDAQ:MVIS)'s largest investor in our database is Daniel S. Och's Sculptor Capital which owns 572,200 shares that are worth $2.1 million.
Number of Hedge Fund Holders: 7
Matterport, Inc. (NASDAQ:MTTR) is an American company that caters to the front end of the virtual reality space. Its software applications allow developers to capture the depth and imagery of a physical space to create a virtual reality environment. The firm is headquartered in Sunnyvale, California.
Matterport, Inc. (NASDAQ:MTTR) reported a strong second fiscal quarter earlier this year, which despite negative revenue growth, saw the firm expand its presence in the market. At the earnings, the firm announced that its subscribers grew by a massive 52% annually to stand at 616,000 during the quarter.
Matterport, Inc. (NASDAQ:MTTR) also counts some of the largest companies in the world as its customers, with firms such as Proctor & Gamble, Sealy, and Netflix part of the 23% of the Fortune 1000 firms that use the company's products. Additionally, the firm's latest quarter also saw it grow its services revenue by 74% and its subscription revenue by 20%.
Insider Monkey took a look at 895 hedge funds for their second quarter of 2022 holdings to discover that 7 had invested in Matterport, Inc. (NASDAQ:MTTR).
Matterport, Inc. (NASDAQ:MTTR)'s largest investor is Chase Coleman and Feroz Dewan's Tiger Global Management LLC which owns 3.6 million shares that are worth $13 million.
Number of Hedge Fund Holders: 23
Unity Software Inc. (NYSE:U) is a software platform provider whose products allow its customers to develop 2D and 3D content for a wide variety of gadgets and devices such as smartphones, tablets, computers, gaming consoles, and virtual and augmented reality platforms. The firm is headquartered in San Francisco, California.
Unity Software Inc. (NYSE:U) is also aggressively targeting growth, with its research and development expenses during its second fiscal quarter representing close to 73% of its revenue. This opens up a large opportunity for explosive growth in the future, should these investments bear fruit.
Needham set a $50 share price target for the company in October 2022, stating that its software platform is one of the best in the world and will benefit from the strong growth in the demand for 3D content. 23 out of the 895 hedge funds polled by Insider Monkey during the second quarter of this year had invested in Unity Software Inc. (NYSE:U).
Out of these, Jim Davidson, Dave Roux, and Glenn Hutchins's Silver Lake Partners is Unity Software Inc. (NYSE:U)'s largest investor. It owns 34 million shares that are worth $1.2 billion.
Number of Hedge Fund Holders: 26
Roblox Corporation (NYSE:RBLX) is an online operating platform operator and developer whose studio allows developers to create and operate virtual 3D environments. The firm is headquartered in San Mateo, California, the United States.
Roblox Corporation (NYSE:RBLX) posted record high revenues of $600 million in its second fiscal quarter, which enabled it to cross $1 billion in revenue for the first half of this year. The company's extreme focus on its products led it to develop a voice chat feature for months before it finally rolled it out to users. Additionally, it has a creative advertising strategy, which creates a unique environment that lets users interact with the ad and then make potential purchases.
Roblox Corporation (NYSE:RBLX)'s platforms are also attractive for advertisers since they provide a large user base of young users that are yet to cement their buying preferences. Needham reduced the company's share price target to $53 from $55 in September 2022, stating that its advertising platform is one of a kind. Insider Monkey's Q2 2022 895 hedge fund survey saw 26 having held a stake in the company.
Roblox Corporation (NYSE:RBLX)'s largest investor is Jim Simons' Renaissance Technologies which owns 11.5 million shares that are worth $380 million.
Number of Hedge Fund Holders: 26
Sony Group Corporation (NYSE:SONY) is a Japanese multinational platform that designs and sells consumer electronics products and owns video game development platforms. The company is headquartered in Tokyo, Japan.
Sony Group Corporation (NYSE:SONY) operates in the hardware side of the virtual reality ecosystem, as it designs and sells the PlayStation PS VR headset. This headset has two modes, 3D and 2D modes. The former lets users view content in HDR resolution at 90Hz or 120Hz, and the latter lets them play games in HDR at 24Hz, 60Hz, and 120Hz.
When compared to some other virtual reality companies that have weak financials, Sony Group Corporation (NYSE:SONY) is an established player that has sold millions of units of its gaming consoles and brings in close to $100 billion in revenue each year. By the end of this year's second quarter, 26 of the 895 hedge funds surveyed by Insider Monkey had bought the company's shares.
Out of these, Sony Group Corporation (NYSE:SONY)'s largest investor is Mario Gabelli's GAMCO Investors which owns 1.7 million shares that are worth $146 million.
Advanced Micro Devices, Inc. (NASDAQ:AMD), Meta Platforms, Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT), Sony Group Corporation (NYSE:SONY) is a VR stock you must look at.
Click to continue reading and see 5 Best Virtual Reality Stocks to Buy.
Disclosure: None. 11 Best Virtual Reality Stocks to Buy is originally published on Insider Monkey.
RESEARCH TRIANGLE PARK – In a move to enhance its hybrid cloud and AI capabilities, IBM will buy the digital product engineering consulting services firm Dialexa in a deal that will close later this year.
IBM announced the deal in a statement, which also notes that the purchase of the firm will “deepen IBM’s product engineering expertise and provide end-to-end digital transformation services for clients.”
When the deal closes, Dialexa will become the sixth company bought by IBM in 2022.
But Big Blue has been on a buying frenzy since April 2020, when Arvind Krishna became the company’s CEO. According to the company, IBM has acquired more than 25 other firms, with 13 to bolster IBM Consulting.
The latest acquisition of Dialexa points toward how IBM may grow its consulting services presence.
“In this digital era, clients are looking for the right mix of high-quality products to build new revenue streams and Strengthen topline growth,” said John Granger, senior vice president, IBM Consulting, in a statement. “Dialexa’s product engineering expertise, combined with IBM’s hybrid cloud and business transformation offerings, will help our clients turn concepts into differentiated product portfolios that accelerate growth.”
The company’s 300 employees are based in Dallas and in Chicago, and will join IBM Consulting, according to the statement. Among the firm’s clients is Toyota Motor North America, which will invest $2.5 billion in North Carolina to build the company’s first U.S. electric battery manufacturing plant in Randolph County.
We live in divided times, when the answer to the question 'what is reality?' depends on who you ask. Almost all the information we take in is to some extent edited and curated, and the line between entertainment and reality has become increasingly blurred. Nowhere is that more obvious than the world of reality television. The genre feeds off our most potent feelings – love, hope, anxiety, loneliness – and turns them into profit... and presidents. So in this episode, we're going to filter three themes of our modern world through the lens of reality TV: dating, the American dream, and the rage machine.
A four-year bachelor’s degree has long been the first rung to climbing America’s corporate ladder.
But the move to prioritize skills over a college education is sweeping through some of America’s largest companies, including Google, EY, Microsoft, and Apple. Strong proponents say the shift helps circumvent a needless barrier to workplace diversity.
“I really do believe an inclusive diverse workforce is better for your company, it’s good for the business,” Ginni Rometty, former IBM CEO, told Fortune Media CEO Alan Murray during a panel last month for Connect, Fortune’s executive education community. “That’s not just altruistic.”
Under Rometty’s leadership in 2016, tech giant IBM coined the term “new collar jobs” in reference to roles that require a specific set of skills rather than a four-year degree. It’s a personal commitment for Rometty, one that hits close to home for the 40-year IBM veteran.
When Rometty was 16, her father left the family, leaving her mother, who’d never worked outside the home, suddenly in the position to provide.
“She had four children and nothing past high school, and she had to get a job to…get us out of this downward spiral,” Rometty recalled to Murray. “What I saw in that was that my mother had aptitude; she wasn’t dumb, she just didn’t have access, and that forever stayed in my mind.”
When Rometty became CEO in 2012 following the Great Recession, the U.S. unemployment rate hovered around 8%. Despite the influx of applicants, she struggled to find employees who were trained in the particular cybersecurity area she was looking for.
“I realized I couldn’t hire them, so I had to start building them,” she said.
In 2011, IBM launched a corporate social responsibility effort called the Pathways in Technology Early College High School (P-TECH) in Brooklyn. It’s since expanded to 11 states in the U.S. and 28 countries.
Through P-TECH, Rometty visited “a very poor high school in a bad neighborhood” that received the company’s support, as well as a community college where IBM was offering help with a technology-based curriculum and internships.
“Voilà! These kids could do the work. I didn’t have [applicants with] college degrees, so I learned that propensity to learn is way more important than just having a degree,” Rometty said.
Realizing the students were fully capable of the tasks that IBM needed moved Rometty to return to the drawing board when it came to IBM’s own application process and whom it was reaching. She said that at the time, 95% of job openings at IBM required a four-year degree. As of January 2021, less than half do, and the company is continuously reevaluating its roles.
For the jobs that now no longer require degrees and instead rely on skills and willingness to learn, IBM had always hired Ph.D. holders from the very best Ivy League schools, Rometty told Murray. But data shows that the degree-less hires for the same jobs performed just as well. “They were more loyal, higher retention, and many went on to get college degrees,” she said.
Rometty has since become cochair of OneTen, a civic organization committed to hiring, promoting, and advancing 1 million Black individuals without four-year degrees within the next 10 years.
If college degrees no longer become compulsory for white-collar jobs, many other qualifications—skills that couldn’t be easily taught in a boot camp, apprenticeship program, or in the first month on the job—could die off, too, University of Virginia Darden School of Business professor Sean Martin told Fortune last year.
“The companies themselves miss out on people that research suggests…might be less entitled, more culturally savvy, more desirous of being there,” Martin said. Rather than pedigree, he added, hiring managers should look for motivation.
That’s certainly the case at IBM. Once the company widened its scope, Rometty said, the propensity to learn quickly became more of an important hiring factor than just a degree.
This story was originally featured on Fortune.com
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Founded in 1911 as a Computing-Tabulating-Recording Company, International Business Machines (IBM) needs to keep its finger on the pulse of the development of information technology not to be ousted by younger tech giants like Google, Microsoft, Apple, and Amazon. With the advent of the internet, IBM needed to widen the spectrum of its products and services to retain its strong position in the tech field. Although the company lost its dominance, having only a 5% market share in 2021, as opposed to 68% shared by Microsoft, Amazon, and Google, it has many spectacular achievements to its credit. IBM holds more patents than any other technology company and takes pride in employees who have earned five Nobel Prizes, four Turing Awards, five National Medals of Technology, and five National Medals of Science. And it had been the top tech company for longer than any of the titans dominating the market now.
Also called “Big Blue,” IBM indeed has an impressive pedigree. After starting to produce hardware at the beginning of the last century, it thrived in this business for decades and became the leading provider of mainframe computers worldwide. IBM’s gross income had inexorably grown in the last part of the twentieth century, expanding from $14.450 billion earned in 1975 to $71.940 billion made in 1995. The company’s revenue skyrocketed to the record level of $106.9 billion in 2011, after which it has steadily been declining amidst its transition into new technologies and lines of business. To move with the times and survive the competition from other tech titans, IBM gradually shifted its focus from hardware to software and services. It began to devote more energy and money to cloud-based services and cognitive computing. IBM focuses now on offering primarily network services, application services, cloud services, digital workplace services, business processes and operations, technology consulting services, and AI services. IBM Watson, a cognitive system capable of answering questions posed in natural language, has become the company’s high-visibility offering in the technology field. IBM has a strong faith in Watson, promoting the system as a benevolent digital assistant that would help hospitals, offices, factories, and farms. The company’s white paper referred to Watson as “the future of knowing.”
To see how well IBM has prepared for, what it calls, the new age of understanding, study the statistical data presented below.
Sources: IBM, Wikipedia
Once an unparalleled tech giant, IBM has been struggling for the last decade. It had to adjust to the changing world by selling its low-margin businesses and investing in high-margin ones. To implement its strategies, Big Blue sold IBM WebSphere Commerce to HCL Technologies in 2018 and a part of the Watson Health business at the beginning of this year. Although IBM’s earnings are still high, they do not reach the levels hit between 2006 and 2012. The company’s annual revenue skyrocketed to $106.9 billion in 2011, whereas it was only $57 billion last year. In the second quarter of 2022, IBM’s earnings dropped below expectations. IBM’s falling fortune is reflected in the table below:
IBM’s Annual Revenue since 2000 (in $US Billion)
|Year||Annual Revenue (in $US Billion)|
|2022 (Q1; Q2)||$14.2 billion; $15.5 billion|
Source: Statista; IBM
Big Blue has repeatedly changed the segment reporting to reflect its move away from being hardware, software, and service company towards becoming a cognitive solutions and cloud platform company. It changed its segment reporting in 2016, 2019, and 2021. The last change was dictated by IBM’s need to align its segment reporting with its platform-centric approach to hybrid cloud and AI. There are presently six segments in IBM’s business: Technology Services and Cloud Platforms, Infrastructure, Software, Consulting, Financing, and Other. In 2021, IBM’s software segment generated $24.14 billion of its global revenue of $57.35 billion. In 2022 so far, the Software division earned $5.77 billion and $6.2 billion, in the first and second quarters, respectively. The Consulting sector brought the company $4.83 billion in Q1 and $4.8 billion in Q2 of the current year. The revenue earned by the Infrastructure segment amounted to $3.22 billion in the first quarter and $4.0 billion in the second quarter. Revenues generated by IBM’s segments in the last two years are shown in the table below:
IBM’s Annual Revenue by Segment for 2020-2021 (in $US billion)
|Technology Services and Cloud||$25.00||$28.00|
In the second quarter of 2022, IBM’s Cloud Infrastructure had only a 4% share of the worldwide market, lagging behind Amazon, Azure, and Google Cloud. The spending on global cloud infrastructure services soared to $55 billion and thus brought the industry’s total for the twelve months to more than $203.5 billion. Outshining IBM, Amazon and Microsoft together accounted for more than half of cloud infrastructure revenues in the three months that ended on June 30.
These figures show how much Big Blue fell from grace because, in the past, it used to enjoy the leading position. In 2017, IBM reported cloud revenue growth of 33% year-over-year in its first quarter earnings. In that quarter, its cloud revenue jumped to $3.5 billion. IBM’s total cloud revenue over the past 12 months that year hit $41.6 billion and catapulted IBM to the top of the list in the field of enterprise cloud. In the first quarter of 2017, today’s winners were obliged only to trail behind with lower earnings: Microsoft with $14 billion, Amazon with $12.20 billion, and Google with $10 billion. The latest market share of the main providers of cloud infrastructure can be seen in the table below:
Worldwide Market Share of Cloud Infrastructure Providers in Q2 2022
Sources: Statista, IBM
Net income is defined as a company’s net profit or loss after it has accounted for all its revenues, income items, and expenses. IBM’s net income for the quarter ending on June 30, 2022, was $1.292 billion, which constituted a 5.06% jump year-over-year. The company’s net profit for the 12 months ending on June 30, 2022, was $5.588 billion, demonstrating an increase of 4.76% year-over-year. Last year, IBM’s annual net income reached $5.743 billion, a 2.74% surge from 2020. The first year of the pandemic brought IBM a net income of $5.59 billion, which was a whopping 40.73% drop from 2019. In 2019, IBM’s annual net profit was $9.431 billion, an 8.05% advance from 2018. The uneven trajectory of IBM’s annual net income is drawn in the table below:
IBM’s Annual Net Income since 2009 (in $US Billion)
|Year||Net Income in $US Billion|
IBM is the fifth largest employer in the United States. In 2021, the company employed 282,000 people worldwide. This year, the number of people working for Big Blue dipped to 245,000. As the company has lately been struggling, experiencing drops in its revenues, it is trying to restructure its business and be on par with such tech giants as Amazon, Microsoft, Google, and Apple. Hence the decline in the number of its employees this year. The table below shows how the number of IBM’s employees has changed over the years:
IBM’s Number of Employees Worldwide from 2000 to 2022 (in 1,000s)
|Year||Number of Employees (in 1,000s)|
As the world is facing a probable recession, analysts believe that the enterprise tech sector will still continue going strong. People who are tech-savvy will turn to IBM in these unpleasant times to help them survive in a tighter economic environment and use the company’s software, consulting, and infrastructure to work productively during an economic decline. Big Blue can definitely provide the products and services people will need in the near future. IBM’s Q2 2022 results signify that technology spending in such spheres as AI, cloud, automation and networking is steady. The company beat anticipated results in the second quarter and boasted its first double-digit quarterly revenue growth in more than a decade. Automatic calculations conducted at Coinpriceforecast.com inspire faith in the company’s future and the cost of its stock. At the beginning of the year, IBM’s stock price was $116.92. At the time of writing, IBM is trading at $118.81, thus demonstrating a 2% jump from January 2022. Coinpriceforecast.com foresees that by Christmas, IBM will surge to $138. In the first half of 2023, the price of the stock might advance to $145 and end the next year at $155, adding 30% to today’s price. Whether or not these predictions prove to be correct, IBM will surely continue pushing technology and innovation forward, as it has spectacularly done since the beginning of the twentieth century.
IBM (NYSE:IBM) acquired Dialexa, a Dallas TX and Chicago, IL-based digital product engineering services firm.
The amount of the deal was not disclosed. The transaction is expected to close in the fourth quarter of this year and is subject to customary closing conditions and regulatory clearances.
The acquisition is expected to enhance IBM’s product engineering expertise and provide end-to-end digital transformation services for clients. Upon close, Dialexa will join IBM Consulting, strengthening IBM’s digital product engineering services presence in the Americas.
Founded in 2010 and led by CEO Scott Harper, Dialexa delivers a suite of digital product engineering services, enabling organizations to create new products to drive business outcomes. The company has deep experience delivering end-to-end digital product engineering services consisting of strategy, design, build, launch, and optimization services across cloud platforms including AWS and Microsoft Azure. Its team of 300 product managers, designers, full-stack engineers and data scientists, based in Dallas and Chicago, advise and create custom, commercial-grade digital products for clients such as Deere & Company, Pizza Hut US, and Toyota Motor North America.
Investors this year increasingly turned away from dividend stocks in favor of the rising yields being offered on bonds. Given that investors can now earn a 4.3% return on a 2-year Treasury note, many prefer that guaranteed return to the risks of putting money into the stock market.
International Business Machines (IBM 1.56%) offers a dividend yield that exceeds that bond return. But with a bear market in progress, are investors better served to take a chance on the cloud stock or to take the 4.3% return at virtually zero risk?
IBM didn't participate in the bull market of the 2010s. The stock dropped as its tech businesses suffered a considerable growth slowdown. In an effort to change that, IBM pivoted into the cloud computing sector aggressively, in part via its $34 billion purchase of Red Hat in 2019. Grand View Research forecasts a compound annual growth rate of 16% through 2030 for the cloud industry. Growth like that could certainly help both IBM and its stock.
Also, IBM spun off its managed infrastructure business into a new public company, Kyndryl. This business was less of a fit with the parent company amid its pivot to the cloud. Separating it off should make it easier for IBM to grow its revenue.
Time will tell if these moves can help the stock price recover. Nonetheless, IBM currently pays its shareholders $1.65 per share every quarter, or $6.60 per share annually. At the current stock price, that adds up to a yield of 5.6% per year. Moreover, depending on your financial situation, the IRS may tax your dividends at a lower capital gains rate, which can offer an added advantage.
Additionally, IBM hiked its payout annually for 27 consecutive years, making it a Dividend Aristocrat. That status carries some importance as many income investors will be more inclined to buy and hold IBM stock because of this status. Also, since abandoning Dividend Aristocrat status tends to hurt a stock, management will probably prioritize maintaining it by continuing to raise those payouts.
Investors also can also reinvest their dividend payments into more IBM stock. However, such newly purchased shares will pay you the dividend yield at that time. The return will rise if the stock falls since investors can buy the exact cash return at a lower price. Conversely, cash yields will drop if the stock rises, but those investors still benefit since the stock has increased in value.
U.S. Treasury notes offer more stability than stocks such as IBM. Investors who purchase the 2-year Treasury note receive semiannual interest payments. At the current interest rate of 4.3%, investors will receive a 2.15% cash return on their invested amount in each of the subsequent three six-month periods. In the fourth period, when the note matures, investors receive the final 2.15% payment along with the return of their principal.
Investors should also be aware that bond values can fluctuate. If interest rates drop, the value of the bond will fall; the opposite will happen if rates rise. This affects investors if they decide to sell the bond early. Upon maturity, the note will return to its par (or nominal) value.
Additionally, bond interest payments are subject to federal income tax but exempt from state and local taxes. In some cases, this is higher than taxes on dividends. Still, bond issuers are obligated to make such payments. In contrast, IBM faces no legal obligation to continue its dividend.
Also, like with a stock, investors can reinvest their interest payments into more notes or other forms of Treasury bonds. However, those purchases will be subject to the prevailing interest rates at that time.
Investors who lack much risk tolerance should choose the Treasury note. Given its guaranteed return, they will not have to worry about volatility.
Nonetheless, for investors comfortable with buying stocks, IBM is a surprisingly strong buy. The cloud industry is in growth mode, which should propel IBM stock to a long-awaited turnaround. Moreover, IBM has repeatedly shown it wants to hold on to its Dividend Aristocrat status. This should supply its income investors returns that are not only larger than the bonds offer, but also likely to increase in size.