Dow 30

IBM operates in five segments, which includes Global Technology Services, Global Business Services, Systems and Technology and in Software.

IBM’s main revenue is generated from the services it provides to its clients. These services are often contractual and can continue for years, thus creating a recurring revenue stream and a backlog. The more contracts the company gets, the more they translate into a future revenue stream. The book-to-bill ratio shows the demand for a company’s products. IBM has a book-to-bill ratio of 0.96—which is below 1—reflecting that its services are not all that much in demand. IBM has also been targeting growth markets, which accounted for 24% its total revenues in 2012; however, this has been declining in every quarter of 2013.

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