IBM CEO Blames Execution for Q2 Software Shortfall
IBM CEO Arvind Krishna admitted that the company's second quarter software shortfall was due to 'execution' issues, but expressed confidence in IBM's business and ability to grow.
Krishna attributed the shortfall to a shift in customer spending priorities towards supply chain constrained hardware and cybersecurity-focused software, which moved away from some of IBM's core software and infrastructure competencies.
CFO James Kavanaugh explained that IBM witnessed a 'shift in client spending priorities' at the end of June, with customers opting for servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases.
Krishna noted that about one-third of the shifted deals had since closed, which he saw as a good indication that it was a deferral rather than destruction of business.