🐂 IBM — Company Profile (Educational)¶
Educational site, not investment advice. Market cap / stock price / quarterly numbers change quickly, so we don't write them. Use SEC + Yahoo Finance links below to check current data.
📌 Basic Info¶
| Field | Value | Source |
|---|---|---|
| Primary business | Hybrid cloud (Red Hat OpenShift) + consulting (IBM Consulting) + software + mainframes (z16/z17) + watsonx AI platform + Quantum | 10-K |
| Founded / HQ | 1911 (as CTR; renamed IBM in 1924) / Armonk, New York, USA | wiki |
| CEO | Arvind Krishna (joined 2020/04) | company announcement |
| Primary listing | NYSE: IBM | — |
| Fiscal year | Calendar year (Jan 1 - Dec 31) | SEC EDGAR |
💡 Real-time market cap / share price / Software growth / consulting backlog / Red Hat growth: see SEC primary + IR links below
🏭 Industry Chain Coordinates (Part 1-C6 framework)¶
Upstream (Who IBM depends on)¶
| Supplier | What flows | Key dependency |
|---|---|---|
Samsung Foundry (SSNLF) |
Mainframe z processors + Telum AI chip | key chip foundry partnership |
NVDA / AMD |
AI server GPUs (OEM model similar to hyperscalers) | AI servers |
INTC / AMD |
General-purpose CPUs | general |
MSFT (Azure) + AMZN (AWS) + GOOGL (GCP) |
Hybrid cloud customer hyperscaler integration | Red Hat OpenShift cross-cloud |
Downstream (Who depends on IBM)¶
| Customer | What flows | Concentration |
|---|---|---|
| Fortune 500 + large enterprises (across industries) | Consulting + software + mainframe systems | long-tail diversification |
| Large banks + financial institutions | Z series mainframe (core transaction systems) + consulting | high-margin vertical |
| U.S. + global governments | Consulting + mainframes + IBM Cloud | government exposure |
| Developers + enterprises | Red Hat (RHEL Linux + OpenShift Kubernetes) | open-source ecosystem |
Competitors¶
- Consulting (direct): Accenture (
ACN) · Deloitte (private) · Capgemini (CAP.PA) · TCS (India) · Cognizant (CTSH) · Infosys (INFY) - Hybrid cloud / Kubernetes:
MSFTAzure ·AMZNAWS ·GOOGLGCP · VMware (AVGOsubsidiary) · Rancher (SUSE) - Mainframes: No new entrants (legacy Unisys, now weak); IBM is near-monopoly
- AI platform (watsonx): hyperscaler in-house AI platforms + Databricks + Snowflake (
SNOW) - Quantum computing: GOOGL Quantum AI · Microsoft Azure Quantum · long-tail startups (Atom Computing / IonQ)
💼 Business Model + Value Capture (Part 1-C7 lens)¶
- Revenue mix: Software (incl. Red Hat) ~45% / Consulting ~30% / Infrastructure (z mainframe + servers) ~20% / Financing the rest
- Gross margin: GAAP ~57%; Software 80%+, consulting 30%+, Infrastructure medium
- Pricing power: Mainframes very strong (switching costs infinite); Red Hat with enterprise OpenShift strong; consulting is hours-based talent-limited — mixed
- Replacement difficulty: Mainframes + long-term consulting relationships deep; Red Hat cross-cloud competitive; AI/Quantum are upside, not cash cows
(For Software vs Consulting vs Infrastructure / mainframe cycle, see latest SEC 10-Q)
🏰 Moat Assessment (Part 3-C2 Buffett 5-step lens)¶
| Type | Strength (0-1) | Reasoning |
|---|---|---|
| Brand | 0.7 | "IBM" 113-year enterprise IT brand; recognized by large enterprises + government |
| Switching cost | 0.7 | Mainframe + consulting + critical software (DB2 / WebSphere / Red Hat) full-stack deep deployment |
| Network effect | 0.5 | Red Hat open-source ecosystem + consulting partner network |
| Scale + cost | 0.6 | Global R&D + consulting talent pool + accumulated IP |
Total: 2.5 / 4 → medium-strong moat (mainframes + consulting are the anchors; Red Hat is the growth engine)
⚠️ Key Invalidation Triggers (Part 3-C5 anti-thesis lens)¶
Monitor; if triggered, re-evaluate thesis:
- Trigger 1 (annual): Software (Red Hat) growth < 10% (historical ~10-15%; growth engine fails)
- Trigger 2 (medium probability): Consulting (IBM Consulting) revenue YoY decline (loses tug-of-war with Accenture)
- Trigger 3 (low probability, catastrophic): Mainframe cycle disruption (z series purchase cycle ~2-3 years; one missed cycle has clear impact)
- Trigger 4 (medium probability): watsonx AI platform fails to monetize, falling further behind hyperscalers
- Trigger 5 (low probability): Major government consulting contract canceled / political turbulence (IBM political exposure is smaller than PLTR but real)
🔗 Cross-Chapter Teaching Links¶
- Part 1-C5 · Hardware Stack — Mainframes still core in finance + government (cross-era stack)
- Part 1-C7 · Value Capture — Hybrid multi-source (software + consulting + hardware) model
- Part 1-C8 · AI Applications — watsonx vs hyperscaler AI paths
- Patterns — #2 incumbent moat · #4 dual engine (software + consulting) · #20 legacy turnaround
📚 SEC Primary Public Filings (DYOR)¶
- SEC EDGAR IBM all filings — complete filing history (10-K / 10-Q / 8-K / DEF 14A)
- Investor Relations — earnings calendar + Investor Day + historical filings
Live quote: Yahoo Finance IBM
Educational · Numbers change, the method does not · Make investment decisions based on your own research + risk tolerance