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IBM had its strongest quarter in years. It’s not enough.

Good morning, and welcome to Protocol | Enterprise. In this Thursday's newsletter: IBM's slowly turning battleship, how tech workers really want to work, and why China is now a bigger cybersecurity threat than Russia.
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"Cloud" has always been a fairly nebulous term in enterprise computing, meaning both a physical location and a new way of thinking about software development. IBM appears to have settled on a definition of "cloud" that translates to "software that helps you use an actual cloud provider."
IBM posted its best year-over-year revenue growth number in a long time on Monday, which would ordinarily be an impressive accomplishment in the second year of CEO Arvind Krishna's tenure — except for the fact that the number was 3%. Still, revenue coming from what IBM called "cloud" services was up 9% during its second quarter to $7 billion.
IBM is in a race that's very familiar to enterprise tech companies of a certain age: It's scrambling to sell new products to old customers who are no longer interested in its traditional businesses. It's hoping that those customers want tools that can help them manage applications running in their own data centers and on public cloud providers.
IBM's strongest quarter in years pales in comparison to the performance of most cloud companies, especially when you factor in the historic surge in cloud demand created by the pandemic.
Red Hat and Krishna have done what they can to get IBM pointed in the right direction. But it's still hard to understand how one of the most iconic companies in U.S. history will ever regain a leadership position in enterprise tech, no matter how many strange television commercials it runs during sporting events.
Old enterprise tech companies are astonishingly hard to kill; they often linger on for years, if not decades, on the backs of their existing customers and their long-understood reluctance to completely throw out systems that might be outdated but still work. But IBM is going to need to show a lot more than 3% growth to thrive.
— Tom Krazit
Micron innovations, like the world's most advanced 1α DRAM and 176-layer 3D NAND tech, deliver the data foundation that enables businesses to turn data into insight and gain a competitive edge.
Zoom zoom: Zoom's growth last year allowed it to very quickly broaden its ambitions as an enterprise tech company, and it made a big move earlier this week into a new business. Protocol's Joe Williams broke down its $14.7 billion deal for Five9 and explained why there's so much interest in call-center technology.
Survey says: The pandemic upended notions of traditional office work, and while there's no consensus on what happens next, it's safe to say we'll never work the same way again. The Protocol | Workplace team surveyed 750 tech workers about their hopes and dreams for the future of work, and the full report is worth your time as an employee or manager at a tech company.
Micron innovations, like the world's most advanced 1α DRAM and 176-layer 3D NAND tech, deliver the data foundation that enables businesses to turn data into insight and gain a competitive edge.
Thanks for reading — see you Monday!
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