Flat Revenue Growth and a stagnant Stock Price.
Since 2000, the company has sold off businesses that collectively generated $24 billion in sales, including Personal Computers and Servers to Lenovo. Good. These are no longer material to the IBM Core.
Interestingly IBM has invested $24 billion in the data analytics business, including $17 billion on 30 acquisitions. In 2013, the business generated nearly $16 billion in revenue. Good. These are Sources of Profitable New Growth.
The street sees this as a “timing & execution” discount as the new Big Data Category and IBM’s non leadership positioning, integration and execution efforts within the Category holding back the stock price.
A classic case of what happens when Internal Innovation slows and needs to be replaced with high cost – high effort M&A.