Who can forget that famous line by radio personality Kasey Kasem, “Number One with a bullet?” Kasem was talking about a particular song moving up the charts quickly, but the same could be said about International Business Machines Corp.(NYSE: IBM ) and IBM stock.
Well, it’s hard to believe, but the company that’s best known for mainframes is making a serious push into the cloud and now sits third in a list of the top ten cloud-computing vendors compiled by Bob Evans, a media veteran who’s followed the tech industry for 20-plus years.
You read that right.
It is ahead of both Salesforce.com, Inc. (NYSE: CRM ) and Sap Se (ADR) (NYSE: SAP ) in the cloud wars and barely behind both Microsoft Corporation (NASDAQ: MSFT ) and Amazon.com, Inc.(NASDAQ: AMZN) in first and second place, respectively.
A measly $900 million separates IBM’s trailing 12-month cloud revenue from Microsoft, the leader among top ten cloud participants with $16.7 billion in TTM cloud revenue. And that’s got to be considered a good thing if you own IBM stock.
Yes, Microsoft touts a forward-projected run rate of $20.4 billion. But I’m going to go with what has come before and not what might come in the future. Apples-to-apples, if you will.
According to Evans, it’s helping companies move from legacy, on-premise computer systems to those run in the cloud.
“IBM has quietly created a $15.8-billion cloud business (on trailing-12-month basis) that includes revenue of $7 billion from helping big global corporations convert legacy systems to cloud or cloud-enabled environments,” Evans wrote in Forbes November 7. “And like #1 Microsoft, IBM plays in all three layers of the cloud – IaaS, PaaS and SaaS.”
Back in November, InvestorPlace’s Tom Taulli touted the strengths of IBM’s cloud business suggesting that it’s got the global capabilities to remain competitive in the cloud and even thrive in it.
“L ook at HSBC Holdings plc (ADR) (NYSE: HSBC ),” Taulli wrote November 8. “The company has signed on with IBM to pull off a massive revamp of its IT infrastructure with cloud technologies. It has involved data center support for banking locations for 60 countries.”
That’s a massive endeavor that only companies such as IBM can pull off. Going forward as more businesses move to the cloud, whether it be public, private or a hybrid, they’re going to look to Big Blue for help.
Given it plays in Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS), that’s going to be good for IBM stock, regardless of what you might think of the rest of its business.
Taulli believes it is at 11x forward earnings, considerably less than MSFT at 26x earnings and AMZN at an eye-popping 132x earnings.
Meanwhile, Lawrence Meyers, another contributor at InvestorPlace , believes IBM remains stuck in the last century. Trading at a premium valuation given its ongoing decline in earnings and revenues – Q3 2017 was the 23rd consecutive quarter with a year-over-year drop in sales – he believes the IBM stock price is anything but cheap.
Where do I stand?
As long as the non-cloud aspects of IBM’s business don’t disappear anytime soon, I see it as very cheap given the work it’s doing to help move legacy systems to the cloud.
As I stated in my most recent article about IBM, it has a free cash flow yield of 6.5% for the trailing 12 months compared to 5.4% for Microsoft and 1.3% for Amazon.
One could argue that it’s wiser to take the slightly lower FCF yield provided by MSFT because its overall business appears stronger than to roll the dice with IBM and its 3.9% dividend yield.
Microsoft was in this very spot three years ago.
I see IBM turning the corner. Maybe not as fast as Warren Buffett would like, but enough progress is on the table suggesting you could make a lot worse investments in 2018 – and many will do exactly that .
In the past 11 years, IBM stock has gained more than 20% on just three occasions: 2009, 2011, and 2016. I see a fourth on tap in 2018.
By Will Ashworth, InvestorPlace Media
Research consistently informs us that educational content is the key to helping win over customer hearts. In fact, one of our favorite stats from Conductor details how buyers are 131% more likely to purchase from a brand immediately after they consume early-stage, educational content. Even our own findings reveal the strength of instructional content throughout the purchase path, with 67% of technology prospects more likely to consider a vendor who educates them throughout each stage of the decision process.
As the impending new year compels marketers to begin planning for better ways to inform and educate customers, we thought it might be interesting to hear what one of LinkedIn’s leading cloud experts has to say about crafting valuable content that consistently captures the time and attention of audiences you so commonly vie for to win and grow new business.
For this perspective we turned to David Linthicum, a leading cloud influencer and author of LinkedIn Learning’s top courses on cloud computing. He recently contributed to the LinkedIn Learning blog’s recap of Tech’s #FutureSkills, in which cloud computing was recognized as among the world’s most in-demand skill over the last few years.
In the piece below, David guides us through his thought process and key learnings from optimizing robust, multi-media content for the tens of thousands of technology professionals who regularly view his courses. We hope you find inspiration and rethink how a fully integrated, multi-touch content experience can help your prospects and buyers come to know and champion your solutions in a more meaningful way.
Without further ado, I’ll let David take it away.
Although I was a college professor for 8 years, I don’t enjoy that style of learning for myself, and never did. I’m not a fan of classrooms.
Why? For me, it’s the lack of interaction and the ability to learn at your own pace. In some topics, I didn’t need to linger. In others, I would need to slow things down.
Moreover, there is the fact that learning is a multidimensional process these days. We no longer just stare at a white board or a slide presentation, but we have the ability to do threads of research as the thoughts come into our heads.
For instance, on-demand courses offer the ability to learn about the origin of a word or concept used in a lesson by checking the Web as you pause a lesson. This has the function of layering that concept or word much deeper in your brain because you’ve engaged other processes to understand it, and not just listened to a lector.
Audiences now have the ability to learn as much as they can about the topic of cloud computing, and do so in such a way that the experience can be better suited to their needs than traditional classroom training. The challenge then, as an instructor, is to have the ability to create content, and, more importantly, have a plan as to how the knowledge will effectively transfer to those watching the on-demand lessons on platforms such as LinkedIn Learning. After crafting many, many courses, here’s what I discovered:
While most students are used to information arriving at a standard pace set by an instructor, everyone learns different things at different speeds. I was encouraged by the number of people who took my on-demand cloud computing courses that were quick to tell me how they stopped and started the courses to better understand what was being presented. In other words, at their pace not mine.
By the same account, there were more advanced learners who inevitably skip to get to the real reason that they took the course in the first place. This means making learning available at a fast pace, which is just as important as learning at a slower one.
On-demand training compared to traditional classroom training has many differences. The biggest one is the quality of content.
As a traditional educator for many years I found that I was giving the same lecture over and over again, but at different degrees of effectiveness. The fact is that you can’t bring your A-game as an instructor each and every day, and the quality of how you present the concept will vary a great deal, as will the learning capabilities of those being instructed.
On-demand means that you’re looking at polished content each time. In other words, the lessons should reflect the best efforts of the instructor to present the right information in the right order, and you’re getting the “best effort” of the instructor in a repeatable way. Hours of thought go into each course that I prepared for LinkedIn Learning, and that content is taken and enhanced beyond my capabilities to ensure that it’s both entertaining, and informative.
Another feature of on-demand training is the ability to make quick progress. Much like we binge-watch Netflix, one course taken should make a student want to move on to more advanced topics, or other topics at the same level.
For example, there are basic courses available on the overall foundations of cloud computing. Once those are completed, you can go into learning about specific cloud services, cloud architecture, and also specific technology that include live demonstrations. The idea is to create a base thread of courses that provide you with the foundation of cloud computing, and then span out from there to build upon what you’ve learned in the previous courses.
Traditional classroom training has been doing this for years; you remember the 100, 200, and 300 level courses in college. However, what’s different here is the speed with which you can both learn as well as progress. There are some people who have taken my cloud computing courses and progressed from the most beginner topics to the most advanced in just a few days, not a few years, as would be the case at a traditional college.
Some have taken other cloud-related courses that I did not author, such as those that go deep on specific cloud computing technologies. In one case, a student reported to me that they spent 2 full days taking the courses on Thursday and Friday. By Monday, they had aced an interview for a cloud computing job at a major company, got the job, and increased their take-home pay by 40 percent.
What these takeaways mean to you really depends upon what role you play. As content creator, author, or marketer it’s a matter of leveraging technology to transfer knowledge. This means being entertaining, interesting, and attentive to detail.
In summary, always think of yourself as learner and consider the advantages of processing or accessing information in a different way. Some might find that this takes practice — or a bit of getting used to — while others will find that these improvements to our craft are a natural progression of something that has needed improvement for hundreds of years.