Re: Lies, damned lies, and quarterly investor calls
"So did AI consulting really blow up, or did salespeople realize they could get a kicker on their quota fulfillment for tagging every possible consulting gig as AI? Not that I'm suggesting that IBM would ever do such a thing, and certainly not that it has ever done so before."
Y'know, I started wondering the same thing. I'm just going to leave this little table I drew up right here (you might have to cut and paste it into something monospace, though):
AI book Consulting Software AI cons AI soft
Q1 2024 >1b 5.186b 5.899b ~0.75b ~0.25b
Q2 2024 >2b 5.179b 6.739b ~0.8b ~0.2b
Q3 2024 >3b 5.152b 6.524b ~0.8b ~0.2b
Q4 2024 >5b 5.175b 7.924b ~1.6b ~0.4b
Q1 2025 >6b 5.068b 6.336b ~0.8b ~0.2b
Q2 2025 >7.5b 5.314b 7.387b ~1.2b ~0.3b
Q3 2025 >9.5b 5.324b 7.209b ~1.6b ~0.4b
Q4 2025 >12.5b 5.349b 9.031b ~2.4b ~0.6b
IBM's said each quarter that the "AI book of business" is 80% consulting, 20% software. Over the period it's been talking about it (last two years), consulting revenue has been basically flat, and software revenue has been growing far *faster* than 20% of the "AI book of business" could possibly explain.
So...yeah, my conclusion is that the "AI book of business" is basically just a label slapped on ongoing consulting revenue. To be fair, in https://cloudwars.com/ai/ibm-genai-business-soars-to-7-5-billion-drives-growth-in-mainframes-consulting/ , the CEO did more or less admit this when asked on a call:
"If I look at consulting, yes, there is a big piece of the AI book of business that is coming because people are directing their dollars towards that kind of consulting as opposed to alternate forms of consulting"