reported revenue in the fourth quarter that beat analysts’ estimates, breaking a streak of five consecutive declines as its push into the hybrid cloud market slowly starts to bear fruit.
The increase stemmed from IBM’s acquisition of Red Hat, which it completed in the third quarter last year, helping boost the cloud and cognitive software division 8.7% from a year earlier.
Chief Executive Officer Ginni Rometty is hanging the company’s future on the market for hybrid cloud, which allows companies to store data in cloud servers on private and multiple public clouds run by its rivals Amazon Web Services and Microsoft Corp.’s Azure.
The company plans to use Red Hat to offer enhanced security services and applications in the hybrid cloud.
Red Hat contributed $1 billion in revenue in the quarter ended Dec. 31, but IBM was only allowed to recognize $573 million of that due to U.S. accounting standards.