The CEO of IBM said she has a strategy in which her company will share tech with Chinese firms.
Virginia Rometty was speaking in Beijing at a government sponsored conference, according to Reuters.
She said that a country of over one billion people needed its own IT industry and it was unfair of foreign multinationals just to milk the market or use it as a place to manufacture kit.
Many foreign companies have made successful businesses in China by taking a partner in the country – the government makes this something of a condition in order to trade there.
The report said that IBM would let local companies build servers using the Power chip and also use the software for the mainframes.
The first beneficiary of the deal is a Chinese firm called Suzhou Powercore, which will manufacture the Power chips for home grown servers.
Rometty didn’t appear to speak of human rights in China, which remain an obstacle for other firms.
Big Blue thinks it can restore itself to its former suited glory by pushing heavily into cloud and big data.
Apparently the outfit has set itself a target of making $40 billion a year from cloud, big data, security and other growth areas by 2018.
The target was mentioned at the company’s annual investor meeting in New York yesterday and is the first hint of a serious “cunning plan” since IBM moved away from its previous strongholds in hardware and servers.
The $40 billion will come from areas which IBM calls its “strategic imperatives,” namely cloud, analytics, mobile, social and security software.
That would represent about 44 percent of $90 billion in total revenue that analysts expect from IBM in 2018.
Those businesses generated $25 billion in revenue for IBM last year, or 27 percent of its total $93 billion in sales.
The company said it would shift $4 billion in spending to its “strategic imperatives” this year.
Revenue at IBM has gradually shrunk over the past three years as it sold off its unprofitable units in businesses such as low-end servers, semiconductors and cash registers.
IBM Chief Executive Virginia Rometty has said she was happy to jettison revenue from such unprofitable businesses, which she dubs “empty calories.” Although we would have thought that empty calories would be a good thing, because they would fill you up without meaning you put on weight.
IBM revenue has now fallen for the past 11 quarters, while earnings growth has been sporadic.
The company says its long-term plan is to hit “low single-digit” revenue growth and “high single-digit” growth in operating earnings per share. Last year IBM withdrew its long-term plan to hit $20 per share in operating earnings for 2015.
Things have not been going that well for IBM of late. It gets more than half of its cash from foreign parts, and the strong US dollar has hurt its sales by more than six per cent this year.
company IBM turned in its financial fourth quarter figures last night, and the news wasn’t all that good.
IBM made net profit in its fourth quarter of $5.5 billion, compared to $6.2 billion in the same quarter of 2013. That’s a fall of 11 percent.
Revenues in the fourth quarter amounted to $24.1 billion, down 12 percent compared to the year before.
However, if this figure includes divestments including customer care outsourcing and System x businesses, as well as currency fluctuations, IBM calculus the decrease is two percent.
Gini Rometty, IBM chairman and CEO, claimed her company had made significant progress in changing its business to higher value services.
Global services fell by eight percent, while technology services also fell by eight percent. Business services revenues also fell by eight percent. Revenues from its software fell seven percent.