IBM insists AI didn't kill software deals, just delayed them
Big Blue says customers postponed rather than abandoned major purchases as hardware soaked up enterprise budgets
IBM is presenting calendar Q2's software wobble as a temporary AI-induced panic, asserting that delayed deals triggering a significant stock slide are starting to return. Just over a week after preliminary results caused stock to plummet, the tech giant focused its earnings call on arguing that nothing fundamental had changed. Customers, executives insisted, had not abandoned software but had prioritized servers, storage, and memory first.
IBM CEO Arvind Krishna stated that the majority of what didn't happen in the second quarter were large capex deals at big clients. Krishna clarified that while a third of these deferred deals have already closed, it is too early to declare victory. Wall Street remained cautious, debating whether clients had postponed software purchases or fundamentally altered spending priorities.
IBM maintained that enterprises temporarily diverted spending toward AI infrastructure, not away from software. The CEO emphasized that AI investment would increase pressure on enterprises to generate returns from their AI spend, particularly in orchestration and data layers. IBM's new Project Lightwell aims to help enterprises with aging open source software using AI-assisted vulnerability discovery, offering a service for $1 million per year.
Early adopters include major banks like Bank of America, Citi, and JPMorgan Chase. IBM sees this as a multibillion-dollar opportunity to capitalize on AI's potential in addressing security concerns in legacy codebases.
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