Latest news with #JamesKavanaugh
Yahoo
19-05-2025
- Business
- Yahoo
AI makes further inroads into the mainframe ecosystem
This story was originally published on CIO Dive. To receive daily news and insights, subscribe to our free daily CIO Dive newsletter. Generative AI is helping enterprises breathe new life into legacy infrastructure, as vendors deploy coding assistants and automation tools that target mainframe estates. Capgemini rolled out a code conversion toolkit designed to refactor COBOL applications and update aging databases, the IT consulting and services firm said in a Wednesday announcement. Rocket Software, which marked 35 years of enterprise IT support this year, unveiled a suite of modernization services, including mainframe anomaly detection automation and a plain-language coding assistant, on Tuesday. Large language model technologies have boosted application refactoring capabilities to the point where many companies are opting to re-engineer mainframe applications rather than migrating them to the cloud, according to ISG market research published in March. 'Service providers are using GenAI to open up new possibilities for clients,' John Schick, ISG consulting lead on mainframe computing, said in the report. 'The functions that mainframes have always performed are still essential to many enterprises, and GenAI provides new ways to maximize their value.' The mainframe ecosystem got an AI boost last month when IBM delivered the latest workhorse in its Z Systems lineage, the z17 mainframe. The newest member of IBM's mainframe family comes equipped with Telum II high-capacity AI processors and will reach general availability in June. IBM's previous Z Systems unit, the z16, had a historically successful run in terms of consistent revenue generation, IBM SVP and CFO James Kavanaugh said during a January earnings call. Coding tools built on LLM capabilities have already unlocked value across the financial sector and are poised to deliver more, Michael Abbott, Accenture senior managing director and global banking lead, told CIO Dive in January. Goldman Sachs, Bank of America and Citigroup tied tangible efficiency gains to coding tools powered by generative AI models. Generative AI-assisted coding is spreading across industries, according to a recent Publicis Sapient report. Executives are confident in the technology's modernization capacity, the digital consulting firm found in a recent survey of 600 IT and business leaders. Four in 5 respondents are eyeing coding assistants to help manage legacy estates, refactor aging applications and automate software testing processes. 'One of the attributes of AI that we like is explainability — the fact that mainframe operations can now be explained in simple English to non-mainframers,' Rocket Software CEO Milan Shetti, told CIO Dive. The software provider is also bullish on generative AI's potential as a training tool for future mainframe talent. Rocket is ramping up efforts to address enterprise mainframe skills gaps and prepare engineers for z17 deployments, the company said. 'One of the most pressing challenges facing enterprise IT teams today is the ability to address the IT skills gap while modernizing core systems and scaling operations,' said IDC Group VP Stephen Elliot in the Rocket announcement. 'AI is a powerful tool that allows IT to effectively align itself to the business by delivering greater insights and efficiency.' Capgemini's efforts center around easing the shift from mainframe to hybrid cloud infrastructure, the company said Wednesday. 'Many organizations have already explored various mainframe migration approaches like rehosting, but none of these lead to a mainframe exit option,' Franck Greverie, Capgemini chief portfolio and technology officer, said in the announcement. As generative AI models matures, the technology can create multiple modernization pathways, Lisa Dyer, SVP at IT services firm Ensono, said in an interview with CIO Dive. 'Clients running mission critical apps on mainframe are not necessarily known historically to be very experimental,' Dyer said. 'Generative AI opens up ways to try out various options safely.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-05-2025
- Business
- Yahoo
How Much Would It Take To Earn $100 A Month From IBM Stock
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. International Business Machines (NYSE:IBM) provides integrated solutions and services in the U.S. and internationally. The 52-week range of IBM stock price was $162.62 to $266.45. IBM's dividend yield is 2.80%. It paid $6.72 per share in dividends during the last 12 months. Don't Miss: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.30/share with a $1000 minimum. Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today. The Latest On IBM On April 23, the company announced its Q1 2025 earnings, posting EPS of $1.60, beating the analyst consensus estimate of $1.40, as reported by Benzinga. Quarterly revenue of $14.54 billion came in above the consensus estimate of $14.40 billion. "Revenue growth, once again led by Software, combined with our productivity initiatives, drove significant gross margin expansion and operating leverage in the quarter," said CFO James Kavanaugh. IBM sees second-quarter revenue in a range of $16.40 billion to $16.75 billion, compared to the consensus estimate of $16.33 billion. Check out this article by Benzinga for 14 analysts' insights on IBM. Trending: Donald Trump Just Announced a $500 Billion AI Infrastructure Deal — Here's How You Can Invest in the Entertainment Market's Next Big Disruptor for Just $998 How Can You Earn $100 Per Month As An IBM Investor? If you want to make $100 per month — $1,200 annually — from IBM dividends, your investment value needs to be approximately $42,857, which is around 179 shares at $239.66 each. Understanding the dividend yield calculations: When making an estimate, you need two key variables — the desired annual income ($1,200) and the dividend yield (2.80% in this case). So, $1,200 / 0.028 = $42,857 to generate an income of $100 per month. You can calculate the dividend yield by dividing the annual dividend payments by the current price of the stock. The dividend yield can change over time. This is the outcome of fluctuating stock prices and dividend payments on a rolling basis. 90/share. For instance, assume a stock that pays $2 as an annual dividend is priced at $50. Its dividend yield would be $2/$50 = 4%. If the stock price rises to $60, the dividend yield drops to 3.33% ($2/$60). A drop in stock price to $40 will have an inverse effect and increase the dividend yield to 5% ($2/$40).
Yahoo
24-04-2025
- Business
- Yahoo
International Business Machines Corp (IBM) Q1 2025 Earnings Call Highlights: Strong Software ...
Revenue: $14.5 billion, up 2% at constant currency. Adjusted EBITDA: $3.4 billion, with a 240 basis points margin expansion. Operating Pre-tax Income: $1.7 billion. Operating Earnings Per Share: $1.60. Free Cash Flow: $2 billion, the highest first quarter free cash flow in many years. Software Revenue Growth: Up 9%, with Red Hat up 13% and Automation up 15%. Annual Recurring Revenue (ARR) for Software: $21.7 billion, up 11% year-over-year. Consulting Revenue: Flat, with a mid-single digit backlog growth. Infrastructure Revenue: Declined 4%, with IBM Z down 14%. Debt Balance: Over $63 billion, including $10 billion for the financing business. Cash Position: $17.6 billion, up $2.8 billion from the end of 2024. Full Year Guidance: Maintaining revenue growth of 5%-plus and about $13.5 billion of free cash flow. Warning! GuruFocus has detected 3 Warning Sign with CCS. Release Date: April 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. International Business Machines Corp (NYSE:IBM) reported strong revenue growth, profitability, and cash flow generation, exceeding expectations for the first quarter of 2025. The company's Software segment grew by 9%, with notable strength in Red Hat, Automation, Data, and Transaction Processing. IBM's generative AI business saw significant traction, with a book of business now over $6 billion, up by $1 billion in the quarter. The upcoming launch of the z17 mainframe is expected to deliver enhanced AI capabilities and new security features, resonating well with clients. IBM's strategic acquisitions, such as HashiCorp, are expected to integrate well with its hybrid cloud strategy, offering synergy opportunities. Consulting revenue was flat, with some clients delaying decision-making, particularly in discretionary projects, impacting in-period signings. Infrastructure revenue declined by 4%, with IBM Z down 14% as the company wrapped up the z16 program. The macroeconomic environment remains uncertain, with potential impacts on client buying behavior and consulting services. IBM's federal consulting business, which is less than 10% of total consulting, could be susceptible to discretionary pullbacks. The company is cautious about the contribution from Consulting for the year, given the current economic conditions. Q: Are you seeing any significant softening in the consumption portion of the Software portfolio, particularly in Red Hat or Transaction Processing? And how is Consulting being impacted by the current macro environment? A: Arvind Krishna, CEO, noted that there was no significant slowdown in the consumption part of the Software business, including Red Hat and Transaction Processing. However, if global GDP slows, there could be a minor impact on Red Hat's consumption business. Consulting is more susceptible to economic pressures, but the impact has been limited so far. James Kavanaugh, CFO, added that the strategic repositioning towards a software-centric model is on track, and Consulting is expected to stabilize. Q: How do you plan to achieve the 5%-plus revenue growth guidance for the full year, especially considering the challenges in Red Hat and Consulting? A: James Kavanaugh, CFO, explained that the growth will be driven by new innovations in infrastructure, contributions from recent acquisitions like HashiCorp, and strong performance in Red Hat. The company expects Red Hat to grow mid-teens for the year, and while Consulting's contribution is expected to be flat, the overall growth drivers remain strong. Q: Can you provide more details on the impact of the federal business and discretionary Consulting projects on your outlook? A: James Kavanaugh, CFO, stated that the US federal business is less than 5% of IBM's total revenue, with 60% being Consulting, which is more susceptible to discretionary pullbacks. However, the impact on the backlog has been minimal. Arvind Krishna, CEO, emphasized that most federal consulting work is mission-critical, reducing the risk of significant impact. Q: What are the dynamics behind the recent performance of the Red Hat business, and how does virtualization play a role? A: James Kavanaugh, CFO, noted that Red Hat grew 13.5% and continues to see strong demand, particularly in virtualization, automation, and Linux capabilities. The consumption-based services moderated to high single digits, but the overall portfolio remains strong. Arvind Krishna, CEO, added that OpenShift is becoming a leading platform for containerization and virtualization, driving long-term growth. Q: With the recent FX changes, why hasn't the free cash flow guidance been adjusted upwards? A: James Kavanaugh, CFO, explained that while FX changes could provide tailwinds, the company is maintaining its $13.5 billion free cash flow guidance due to the dynamic macro environment. The focus remains on disciplined execution and maintaining a strong liquidity position. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
CNA
23-04-2025
- Business
- CNA
IBM says 15 contracts impacted by DOGE cost cuts, shares drop
International Business Machines said 15 of its government contracts were shelved under a cost-cutting drive by the Trump administration, a setback that eclipsed its upbeat revenue forecast and dragged its shares down over 5 per cent after hours. The federal consulting businesses of Big Blue's rivals such as Accenture have also taken a hit from belt-tightening efforts by the U.S. administration and its Department of Government Efficiency (DOGE). The impacted contracts amounted to about $100 million, which was less than 1 per cent of the order backlog in IBM's consulting unit, finance chief James Kavanaugh told Reuters on Wednesday. Still, some analysts said the cancellations fanned uncertainty for the company at a time when U.S. tariffs cloud the global economic outlook. To bolster investor confidence, IBM broke from its long-standing practice of not issuing quarterly forecasts. It also reported better-than-expected first-quarter earnings and maintained its target of achieving at least 5 per cent revenue growth on a constant currency basis in 2025. "We've chosen now, in light of the very unprecedented dynamic of uncertainty going on in the market, to give a second-quarter revenue guidance range," Kavanaugh said. "We felt incumbent upon ourselves to give as much transparency as possible to our investor group." IBM shares have gained 12 per cent so far this year, outperforming the benchmark S&P 500 index, which has declined nearly 9 per cent. The company forecast June-quarter revenue between $16.40 billion and $16.75 billion, above analysts' average estimate of $16.33 billion, according to data compiled by LSEG. In the first quarter, its revenue rose 1 per cent to $14.5 billion. Consulting revenue fell 2 per cent to $5.1 billion, roughly in line with estimates. Some investors may focus more on the contract cancellations, given the economic uncertainty, said Michael Ashley Schulman, chief investment officer at Running Point Capital. "In a world wobbling on policy pivots and macro murk, IBM's mostly good quarter may not be enough to assuage all the negative macro sentiment." Adjusted profit stood at $1.60 per share, compared with estimates of $1.40 per share, helped by growth in the high-margin software segment. IBM's AI Book of Business — a combination of bookings and actual sales across various products — stood at more than $6 billion inception-to-date, up about $1 billion from the previous quarter.
Forbes
09-04-2025
- Business
- Forbes
IBM Launches Z17 Mainframe With Full AI Integration
IBM has designed the new z17 mainframe platform to enable — and benefit from — AI across many of its ... More functions. IBM launched the latest version of its dominant mainframe platform — the z17 — at its virtual IBM Z Day event this week. The z17, which features comprehensive AI integration, is designed to bring AI workloads closer to enterprise data. Embedded AI accelerators within its microprocessors support predictive and generative AI models alongside AI-powered security features. The z17 also leverages AI for critical system functions such as tuning and management. It is scheduled to be generally available in mid-June of this year. Last month I received an advance briefing on the z17's capabilities during an analyst event held at IBM's new headquarters in New York. The new rollout builds on the success of the predecessor in the Z lineup, the z16, which debuted in 2022 and delivered consistent revenue growth, showing the enduring value of IBM's mainframe offerings half a century after the technology became widespread. 'This has been one of the longest-running and most consistent programs in terms of revenue growth we've ever seen,' noted IBM's CFO James Kavanaugh on the company's Q4 2024 earnings call. Nate Dotson, principal product manager for IBM z17, framed the strategic direction for the launch: 'The z17 presents new possibilities, evolving how enterprises can utilize their core systems through AI, automation and enhanced security. Our focus is on three key areas: supporting innovation and growth with AI, enabling automation and transformation for efficiency, and enhancing the security of critical data.' AI advancements for mainframes can improve and secure business interactions, leading to faster, more reliable, personalized consumer experiences. This is particularly important because many everyday consumer transactions rely on mainframe technology, including most credit card purchases as well as other steps in financial transactions such as identity verification. (Note: IBM is an advisory client of my firm, Moor Insights & Strategy.) Despite common misconceptions about mainframes being relics of a bygone era, they remain a significant component of the modern IT landscape. Mainframes are widely recognized for high reliability, scalability and performance, which is what allows a technology that became common during the Cold War to support today's technologies and hybrid infrastructure models. They manage substantial volumes of critical business data and process a considerable portion of the world's transactional workloads. The IBM Institute of Business Value reports that 79% of IT executives consider mainframes essential for enabling AI-driven innovation and value creation. Modern mainframes offer significant processing power, handling up to 30,000 transactions per second, and can accommodate substantial data with up to 40 terabytes of memory. Economically, 75% of IT executives report that mainframes are equal to or better than cloud computing in terms of total cost of ownership. According to IBM, organizations that integrate mainframes into a hybrid-by-design strategy achieve a 3x higher ROI from their digital transformation efforts. The overwhelming majority (88%) of executives from the same study believe that modernizing mainframe applications is critical for achieving long-term success in digital transformation. Meredith Stowell, vice president for the IBM Z Ecosystem, presents at an analyst event in New York ... More City. The z17 incorporates several new AI-related features, including the ability to use multi-model AI in real time by combining AI models and LLMs for every transaction. Integrating multiple AI models enables deeper analysis and understanding of transactional data, increasing predictive accuracy by uncovering patterns and trends that might otherwise go unnoticed. And real-time processing ensures that decisions such as flagging suspicious transactions or approving loans are made instantly. In the case of a financial institution, this could lead directly to faster and more accurate fraud detection, credit risk assessments and anti-money-laundering measures. This protects both customer accounts and the institution itself while also improving customer experience, for example by enabling quicker loan approvals. The expanded insights and accuracy also help meet stringent regulatory requirements by ensuring thorough transaction monitoring. Meanwhile, retailers can explore generative AI models on the mainframe to refine customer interactions and recommendations. Airlines rely on mainframes to manage booking systems and ensure smooth customer service, while insurance companies use them to process high volumes of claims efficiently. In industries dealing with high volumes of transactions, mainframes' extreme scalability for rapid processing can result in better customer satisfaction and retention. The new ability in the z17 to process AI tasks on the mainframe is intended to further improve latency, potentially leading to quicker service responses. The IBM Z environment also addresses key data privacy and compliance considerations. The inherent scalability of mainframes ensures consistent service during peak demand, while the built-in resilience is designed for zero downtime. The AI infrastructure within the z17 aims to improve efficiency in AI workloads and offer enhanced throughput compared to some distributed GPU models. IBM has enhanced the z17 with the Tellum II Processor AI Accelerator, a second-generation accelerator integrated into the processor for complex computations associated with LLMs. Its architecture supports relevant computational primitives, facilitates remote AI access across the system and optimizes compute capacity through new data types. The Spire Accelerator, a dedicated AI accelerator available on a PCIe card, will be available as an add-on for z17 in Q4 2025. Designed for generative AI tasks, it has 32 cores and 128GB of LPDDR5 memory. Its architecture allows for clustering, which increases processing capacity. The accelerator supports both 4-bit and 8-bit processing for efficient execution of LLMs, reducing the need to move sensitive data off-platform. Tina Tarquinio, vice president of product management at IBM, emphasized the strategic imperative behind this AI integration. 'IBM isn't just adding AI for technology's sake, but is purposefully engineering AI capabilities to enhance the most critical business operations,' she said. '90% of the world's credit card transactions run through the mainframe. 70% of the world's [financial] transactions, by volume, run through the mainframe. We need the AI where it matters most, and for all of our clients, it needs to happen fast, it needs to happen reliably and it needs to happen securely. And this is what we've built the stack for.' A sample unit of the IBM z17 mainframe on display during an analyst event at IBM in New York City Because mainframes process such vast amounts of transactions, data security is paramount. IBM Z has historically provided a robust environment for sensitive data, and the integration of AI should bolster this capability. By processing AI workloads on-chip or within the Spire accelerator, the z17 enhances security by keeping sensitive data within the mainframe environment. The mainframe's encryption capabilities extend to AI operations, making the environment especially suited for highly regulated industries such as financial services and healthcare. The z17's local processing could also lower costs by minimizing reliance on external computing resources. Mainframes have a history of providing value for enterprises by enabling them to process enormous amounts of data while keeping costs remarkably low. One indicator of this: despite handling 72% of global transaction workloads, mainframes account for only 8% of IT costs. Cost is only one consideration. IBM designed the AI features in z17 to focus on efficient energy utilization, which is becoming increasingly critical as AI strains energy resources and impacts carbon footprints. The new infrastructure is intended to lower energy consumption for AI workloads compared to some traditional methods — and to the z16 — which could help organizations better manage operational costs and address environmental considerations. IBM views AI integration into the IBM Z platform as a crucial step in the ongoing evolution of enterprise computing. In this context, IBM plans to further enhance AI capabilities for the Z platform while continuing to integrate it with hybrid cloud environments — and to explore quantum computing. To support the adoption of these AI capabilities on the mainframe, IBM is actively developing and offering upskilling and training programs as well as strategic partnerships. The company's Z Mainframe Skills Depot provides different learning paths and training for various roles in the mainframe ecosystem. Currently, it covers roles including system admin and application developer, with plans to expand to include a security-focused learning path in the future. Because a significant portion of the mainframe workforce is reaching retirement age, upskilling and training programs are critical for building a new generation of professionals. By 2035, many experienced workers will have retired, creating a pressing need to transfer knowledge and expertise to younger talent. These initiatives are essential for maintaining operational continuity and enabling businesses to fully leverage AI capabilities on the mainframe. IBM's professional development and community programs are similar to Broadcom's Vitality Residency Program, which my colleague Matt Kimball wrote about last year. This trend of supporting mainframe talent development is a testament to the staying power of the technology and its importance in data processing. Although consumers may not directly engage with mainframes or fully comprehend their operational role, their influence remains significant. As the unrivaled dominant player in the mainframe market, IBM and its Z platform play outsized roles in the ongoing relevance and innovation of mainframes. Ultimately, these systems facilitate rapid transaction processing at great scale, personalized service delivery and secure business interactions, while also contributing to sustainable operations. For many businesses prioritizing good customer experience alongside effective risk and cost management, IBM Z represents a critical infrastructure component. As IBM continues to integrate intelligent features that can influence the future of customer experience, it's essential to recognize evolving perceptions of the mainframe. In the AI era, it may well become a foundational element for modern customer experience and business operations.
