IBM CEO Touts Rebound After Q2 Execution Shortfall
IBM's CEO Arvind Krishna acknowledged that the company experienced an execution shortfall in its second quarter of fiscal 2026, resulting in a significant software sales shortfall.
The shortfall was attributed to a shift in customer spending from IBM's core software and infrastructure competencies to supply chain-constrained hardware and cybersecurity-focused software.
According to Krishna, the company witnessed a 'shift in client spending priorities' at the end of June, with clients opting for servers, storage, and memory purchases 'to secure supply constrained infrastructure ahead of expected price increases.'
This led to IBM missing out on closing large deals, which accounted for the majority of the shortfall.
Krishna stated that about one-third of those shifted deals had since closed, giving the company a sense that this was a deferral rather than destruction.