International Business Machines (NYSE: IBM), a company that has been largely written off by investors over the past decade, is having a moment. A yearslong transformation effort has rejiggered the company's portfolio, aligning it on two priorities: Hybrid cloud computing and artificial intelligence. In both areas, IBM's strength lies in its ability to offer full-scale solutions to its enterprise clients.

AI is still a small business for IBM, but it's growing incredibly fast. The company's secret weapon is its consulting business. "Consulting is a core driver of our value proposition for clients," said IBM CEO Arvind Krishna in the fourth-quarter earnings call. IBM provides an AI software platform called watsonx that enables its clients to train, deploy, and manage AI models, but it's the guidance and implementation expertise provided by the company's consulting arm that's closing deals.

At the end of the third quarter, IBM's book of business related to generative AI and watsonx was in the low hundreds of millions of dollars. This isn't revenue, but instead the amount that clients are committing to spend. That amount doubled in the fourth quarter. Software drove just one-third of this business, with consulting signings driving the remaining two-thirds. Clearly, the consulting arm is doing the heavy lifting.

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Source Fool.com