2026-07-23XQuote

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In the last ten years $IBM has done roughly $60B in disclosed amount deals (many more with undisclosed terms). Their “growth” is certainly not mostly “organic”.

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$IBM CEO Arvind Krishna says he has complete conviction in double-digit long-term software growth despite the Q2 hiccup. 80% of the business is annuity or subscription based, growing from low single digits seven years ago to 8% and approaching 10%. The 80/20 mix used to be 60/40 and continues to climb. They are investing in capabilities growing at 15% to 20%, citing HashiCorp and Confluent as examples they accelerated after acquisition, along with their organic watsonx portfolio. "Let me actually address your question first we and I have complete conviction in the double-digit long-term software growth. Let me be clear about that. As you heard Jim describe, 80% of our business is already, I'll use the word annuity or in some sense subscription based. That piece we have grown from extremely low numbers. I would say it was low single digit seven years ago to 8% and approaching 10%. We already got that there. We have a few different paths on how to get to 10%, not just one. We can keep growing that part faster and that can approach not just 10% but above 10%. That means that the other 20% has to grow smaller by the way, every single year. That mix of 80, 20 used to be 60, 40. So as we go over time, that mix is going to climb up and more and more is annuity as opposed to transactional. And both organically and inorganically, we are investing in capabilities that are much higher growth than this mix. We are investing in capabilities that grow more at 15% to 20% So that helps that overall growth rate. As an example, we brought HashiCorp in And we accelerated it. We brought Confluent in and we accelerated it. Our organic watsonx portfolio is also growing at much higher rates than the aggregate. So that is the point that we are going to and we are not going to back off from our commitment of long term double digit for Software despite the 2Q hiccup. And I'll let Jim comment on the TPP and mainframe growth rates including the cycles that we see there."
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