A Step-by-step guide on the Detailed Business Model Of IBM

Updated on: Sep 20, 2021
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Were you looking for a detailed article explaining the business model of IBM? You are in the right place!

IBM stands for International Business Machines, it is an American multinational technology corporation that is headquartered at Armonk New York. They operate in more than 171 countries, they got ingrained in the year 1911 and were founded by a trustful businessman Charles Ranlett Flint. They produce and sell computer hardware, middleware, and software. They also provide hosting and consulting services, their areas are mainly ranging from mainframe computers to nanotechnology.

In this case study, we’ll study various segments in the IBM business model. This will include global technology services, global business services, software services, system hardware services, and global financing.

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About IBM

IBM is an over 100 years old company. IBM was founded in 1911. It was Charles Ranlett Flint who founded the International Business Machines (IBM), as a holding company for four other business companies: Julius Pitrap Computing Scale, Herman Hollerith’s Electric Tabulating Machine, Alexander Dey’s Dial Recorder and William Bundy’s Time Clocks.

International Business Machines is an American IT Company and also one of the world’s massive computer companies and services with undertakings in around 177 countries.

The business model of IBM began as the Computing-Tabulating-Recording Company in 1911.Flint founded the IBM business model with a “four heads are better than one” approach towards fulfilling financial obligations and manufacturing products for automating routine business processes, thereby increasing productivity, while reducing defects and human errors.

Contributions of IBM

IBM business models introduced many innovative things to the world, such as 

  • the UPC barcode
  • the magnetic stripe card
  • the personal computer
  • the floppy disk 
  • the hard disk drive and 
  • the ATM


You can see the proof of this DNA, that IBM files thousands of patents every year. The business model of IBM company invests billions of dollars in research and development.

The slogan “THINK” became their company’s anthem, inspiring integrity and loyalty from its employees, as well as salesman-consumer relationships that would become the future of CTR.

CTR? Yes. Let us look into it.

When the company was founded, CTR was the name of the company. Later in 1924, it was changed to International Business Machines (IBM).

IBM business model is committed to doing Research and Development in the fields of,

  • Mainframe
  • Nanotechnology 
  • Personal computers to Data management
  • Virtualization and
  • Cloud services

IBM business model makes money by selling this on an annual contract

Let us look into the present scenario of IBM company

Presently the business model of IBM is involved in the research of Cloud computing, Databases and Artificial intelligence. IBM’s subsidiaries have reached 177 countries with an estimated 400000 employees worldwide. Around 800 different companies are a part of the IBM business model.

The business model of IBM has a revenue of $79 Billion with an estimated net worth of upwards of $170 Billion.

As of now, you have understood what the business model of IBM is. Let us dive deeper into the different segments of IBM company…

Business Model of IBM

For a proper understanding of the IBM business model, one needs to know about the different segments in the business model of IBM.

They are:

  • Global Technology Services (GTS)
  • Global Business Services (GBS)
  • Software
  • Systems Hardware
  • Global Financing

These are the different segments that help IBM to channelize its business. So let us get started with these segments.

Global Technology Services (GTS)

The business model of IBM has very good IT infrastructure and IT services that would be able to serve industries such as 

  1. Retail
  2. Telecommunication
  3. Health care, etc… 

The IBM company is doing this by 

  • strategic outsourcing
  • Integrated technology 
  • Support
  • Cloud services, and some others…

Global Technology Services and Global Business Services are collectively called IBM company’s Global Services. Let us look into the next segment.

Global Business Services (GBS)

When talking about Global Business Services of IBM business model, consulting and integration services are the services included in this segment. 

So, we can divide Global Business Services of the business model of IBM into two categories


  • Expertise in business strategy
  • Technology
  • Finance
  • Marketing
  • Operation
  • Supply chain
  • Application management
  • Support services for packaged software
  • Maintainance
  • Custom and legacy application

Next, let us go through the Software services segment.

Software services

The Business model of IBM provides software services for the people who require software assistance and middleware services that connects all the systems in the customer’s company.

These are some of the software services provided by IBM company

  • WebSphere
  • Tivoli
  • Rational
  • Information Management
  • Mobile
  • Social Workforce

Now we’ll go into the Systems Hardware services segment.

Systems Hardware Services

The IBM business model also offers the best hardware services and also installation services for their clients.

It provides technologies for 

  • Data centres
  • Semiconductor technology
  • Data storage products and products
  • Packaging solutions

This company is also responsible for providing solutions related to

  • Microelectronics
  • System Z
  • System X
  • Power Systems
  • Disk, Tape, and Flash Storage

IBM company also gives much importance to the hardware services.

Finally, let us go into the Global Financing segment.

Global financing

IBM also provides financing services to clients who require lease facilities, instalment options, etc…

The key services offered by IBM are

  • Client financing
  • Commercial financing
  • Remanufacturing and remarketing

Hence these are the part of IBM in the Global Financing segment.

As of now, you came to know about the different segments of the IBM business model and its functions. Note that these are the factors that play a vital role in generating revenue for the company. 

Hence these segments are the important segments that provide the best services to people all around the world.

Still here? Let’s Conclude.

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IBM helps solve the problems of large corporations by providing IT Services. It is proved that when we look back into history, the business model of IBM has solved many problems of the world by their innovations and services. When we look now, the same perception of the company is followed even after 100 years. That’s why the IBM business model is one of the successful business models in history.

IBM’s Consulting teams bring the insights born of expertise the software team infuses intelligence into clients operations. Then systems and tech team provides uncompromising and indestructible heavy lifting 

And Finally, The services team brings the analysis to make sure that the job gets done. All of this exists in the service of one goal, to help the large corporations by solving their problems and thus helping them to generate more revenues.

If you liked our work and are interested in learning further then do check our website for more. Also, if you’re interested in Digital Marketing, you can check out our Free Digital Marketing Masterclass by Karan Shah.

Thank you for reading, and if you liked our then do share this in your circle.

Until then, see you next time



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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]


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