Will Solid Consulting Revenues Boost IBM’s Q3 Earnings?
International Business Machines Corporation IBM is scheduled to report third-quarter 2024 earnings on Oct. 23. In the to-be-reported quarter, the company is likely to have recorded higher revenues from the Consulting segment backed by rising demand for technology consulting and business transformation services.
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The Consulting segment comprises Business Transformation, Technology Consulting and Application Operations. It provides consulting and application management services that offer value and innovation to clients by leveraging industry, technology and business strategy, and process know-how.
During the to-be-reported quarter, IBM augmented the generative artificial intelligence (AI) capabilities of its managed Threat Detection and Response Services with the launch of the IBM Consulting Cybersecurity Assistant. Designed to accelerate and improve the identification, investigation and response to critical security threats, the Cybersecurity Assistant will form an integral part of IBM’s watsonx data and AI platform along with IBM Consulting Advantage. This, in turn, is expected to empower IBM consultants to respond more proactively and precisely to critical cyber threats with consistency, repeatability, quality and agility.
In the third quarter, IBM inked an agreement to acquire Accelalpha, a global expert at implementing, integrating and managing Oracle Cloud Applications. With this buyout, IBM aims to strengthen its Oracle consulting expertise across key areas, including supply chain and logistics, finance, enterprise performance management (EPM) and customer transformation. Post-acquisition, IBM will integrate Accelalpha’s large global team of skilled consultants within its infrastructure, enabling the company to help its clients deploy and manage cutting-edge Oracle solutions, including generative AI and cloud technology. This advancement is anticipated to improve IBM’s productivity and deliver increased competitive advantages to its clients through Oracle’s Cloud applications and technology.
During the quarter, IBM secured a five-year contract from the U.S. Agency for International Development (“USAID”) to support its Cybersecurity Protection and Response program. Per the contract, IBM will help USAID expand and enhance its cybersecurity response support for host governments in the Europe and Eurasia region. IBM’s multidisciplinary team will provide the continuous assistance needed to help USAID strengthen its critical infrastructure to identify, protect, detect, respond and recover from cyberattacks. These are likely to have generated incremental revenues in the Consulting segment.
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