IBM CEO Blames Execution Shortfalls for Software Sales Dip
IBM CEO Arvind Krishna admitted to 'execution' shortfalls in the company's second quarter software sales, but expressed confidence in the strength of its business and ability to grow.
The shortfall was attributed to a sudden shift in customer spending towards AI-focused hardware components outside IBM's traditional offerings, as well as a shift in client priorities towards supply chain-constrained infrastructure ahead of expected price increases.
Krishna stated that the number of shifted deals was in the 'low 10s' and that about one-third of them had since closed. He emphasized that this was a deferral rather than destruction, citing the company's ability to capture growth opportunities ahead.
IBM is accelerating changes to its go-to-market model to expand coverage across thousands of additional clients where its portfolio is highly relevant. The company is also increasing the use of AI to help scale software development, bolster sales and marketing efforts, and optimize supply chains.