Vice president of blockchain technologies at IBM, Jerry Cuomo, thinks enterprise blockchain leads to other expenditures at Big Blue.
“It is driving additional spend,” Cuomo said. “When you look at the direct attribution of the actual dollars spent on the blockchain, we are seeing that for every dollar spent, $15 is spent on other cloud services.”
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The rough calculations provide us with a revealing peek into IBM’s current view of the blockchain. Cuomo’s revenue figure is a result of the company’s effort to bring enterprise blockchain closer to its straggling cloud offering. Some of the remarks on the move characterized the move as a reprioritization, or even consolidation.
“Blockchain is a new class of enterprise application,” Cuomo said in an interview with CoinDesk. “It plays into trends like app modernization and new cloud-native applications, data and analytics. It crosses all those things.”
A blockchain application contains only about 20% of the blockchain technology, which leaves 80% of other tech to create the platform, said Cuomo.
There are some radical transformations in IBM’s overall business strategy. Last year, IBM paid $34 billion to acquire the open-source software company Red Hat, a move which yields results. IBM reported the so-called “surprising revenue growth” for Q4 2019. Cloud and cognitive software revenue climbed 9%, while Red Hat’s revenue jumped 24%.
Moreover, the CEO of IBM, Ginny Rometty, will be replaced by the new Chief Executive, Arvind Krishna on April 6. Krishna is the Senior Vice President of the cloud and cognitive business, and the person behind the Red Hat deal. It is IBM’s biggest acquisition yet, as well as one of the biggest in U.S. tech history.
Concerning the Big Blue’s reprioritization, Cuomo said IBM has “put its chips down on the table in a very aggressive way around the hybrid space.”
The hybrid cloud market contains a mix of on-site, private-cloud, and public-cloud solutions, where work can be done across these different platforms. The value of the market, according to McKinsey & Company, is roughly $1.2 trillion.