IBM Is America’s Worst Big Tech Company

By Douglas A. McIntyre Published Aug 27, 6:40AM EDT

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International Business Machines Corp. (NYSE: IBM | IBM Price Prediction) was once America’s premier tech public corporation.
Now it pales in comparison to Microsoft Corp. (NASDAQ: MSFT) and other mega tech leaders.
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International Business Machines Corp. (NYSE: IBM) is America’s worst big tech company. Or, maybe it is too small for that. After years of shrinking at the top line, followed by less than mediocre growth, it has a market cap of $182 billion. The Microsoft Corp. (NASDAQ: MSFT) market cap is $3.1 trillion. Microsoft will be one of the dominant players in the future of artificial intelligence (AI). It would be almost impossible to find anyone who understands tech companies to see the same in IBM’s future. Microsoft currently dominates the cloud sector, just behind Amazon.com Corp. (NASDAQ: AMZN). IBM is barely a player.

In IBM’s most recent quarter, it had revenue of $15.8 billion. Net income was $1.8 billion, a margin of 11%. Microsoft’s revenue was $64.7 billion for the same period, against a net income of $22 billion. That is a margin of 34%. IBM expects growth at single-digit percentages for 2024. Microsoft’s will be well into the double digits.

IBM’s business never got off the ground in cloud infrastructure market share. In the first quarter, the sector became the primary driver of revenue across the industry. Amazon’s market share, according to Statista, was 31% in the first quarter, followed by Microsoft at 25%. IBM’s was 2%.

In 1990, IBM was number four on the Fortune 500. Microsoft was not on the list of the top 100. Amazon was not founded until 1994. IBM missed the rise of PC operating systems, e-commerce, search, and smartphones, which were at the heart of the industry’s success. For all those failures, investors paid the price.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.