IBM chairman and CEO Ginni Rometty remains confident in her company’s long-term ability to “endure.” Now, she must convince skeptical investors to remain patient. Again.
Speaking with the media shortly before the company’s annual investor briefing Thursday, Rometty outlined her key messages for shareholders. Throughout the day, she said management will offer “uncharacteristic detail” about bold spending plans and the need for more “open ecosystem” partnerships. You can expect these to model the alliances forged in recent months with Apple (enterprise mobility) and Softbank (new analytics services built on Watson). One priority: pacts that solidify IBM’s analytics offerings in strategic industry sectors.
“There will be no doubt in your mind about our beliefs, our plans,” she told journalists.
Among the high-level blueprints with a short-term financial impact: IBM intends to invest $4 billion on analytics, mobility, cloud computing, and security. It will do this by increasing and shifting spending, but that amount doesn’t count acquisitions. You can definitely expect more, to fill market gaps or accelerate share. “When we move, it’s when we see long-term value,” Rometty said.
At the end of 2014, these areas accounted for 27% of IBM’s overall revenue, about $25 billion. Within four years, they will drive 40% of revenue, an anticipated $40 billion, she predicted. “The core is innovated, we have confidence in these strengths,” she said.
Last year, hardware drove barely 10% of IBM’s sales. The unit remains profitable as the company divests low-margin businesses, like it did by selling its low-end server portfolio to Lenovo. That’s a pattern the company’s financial management intends to repeat as the transition continues. For perspective, IBM’s overall revenue dipped to $93 billion in 2014, from $107 billion back in 2011.
“Much of our decline in revenue has been engineered by us,” Rometty said.
That may be so, but investors are growing impatient with how long the turnaround is taking. Rometty’s previous long-term plan envisioned hitting $20 per share in operating earnings this year. The guidance is now $15.75 to $16.50 per share.
This item first appeared in the Feb. 26 edition of Data Sheet, Fortune’s daily newsletter on the business of technology. Sign up here.
