International Business Machines Corporation IBM is scheduled to report second-quarter 2025 earnings on July 23. In the to-be-reported quarter, the company is likely to have recorded higher revenues from the Software segment with a strong focus on product innovation and growing clout of watsonx.ai across various sectors.
The Software segment includes Hybrid Platform & Solutions comprising software services, Red Hat, automation and data & artificial intelligence (AI) businesses and Transaction Processing.
During the second quarter, IBM extended its multi-year partnership with Microsoft Corporation by establishing a new Microsoft Practice within IBM Consulting. Leveraging the strengths of both companies, the collaboration aims to develop innovative offerings and industry-specific solutions across various verticals such as retail, consumer packaged goods, government, financial services and supply chain. Complementing IBM Copilot Runway and IBM Consulting Azure OpenAI Services, it intends to deliver customized solutions to help businesses unlock new growth opportunities, navigate complex AI, facilitate seamless cloud transition and accelerate digital transformation.
In the quarter, IBM acquired Hakkoda Inc., a prominent data consultancy provider, for an undisclosed amount. The acquisition is expected to strengthen IBM’s data expertise and augment its capability to support clients’ AI transformation initiatives. IBM will also gain access to Hakkoda’s comprehensive portfolio of generative AI tools that effectively expedite data modernization projects and offer clients the necessary flexibility, scalability and strategic guidance to promote their innovation journey.
In the quarter under review, IBM launched watsonx AI Labs in New York City to accelerate AI adoption. This collaborative hub of IBM researchers and engineers with startups, scale-ups and some of the world’s largest enterprises will seek to co-create agentic AI solutions for clients and foster the growth of the innovation ecosystem. The watsonx AI Labs will connect IBM’s enterprise resources and expertise with the next generation of AI developers seeking to build breakthrough AI applications for businesses. Leveraging the rich technology landscape of the city, the lab aims to attract local talent through collaborations with local universities and research institutions to help build new businesses and applications that will reshape AI for the enterprise. These are likely to have translated into incremental revenues in the Software segment.
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