FORTUNE -- IBM (IBM) chief executive Virginia "Ginni" Rometty is passing up her annual bonus.
It's a rare move for any tech CEO, and it signals that Rometty knows she's got trouble on her hands. She made the announcement Tuesday as the company missed Wall Street's expectations yet again for its quarterly earnings, reporting a 5% annual revenue decline to $99.8 billion for 2013. Net income according to generally accepted accounting principles fell 1% for the year, to $16.5 billion.
It's the third quarter in a row that Big Blue has left analysts feeling disappointed.
In short, a technology company that has built its reputation on moving fast to exit aging businesses while being the first to enter new businesses is not moving fast enough. In the two years since Rometty took the top job at IBM, the Armonk, N.Y.-based company has fallen behind in building the tools of the future -- namely for cloud computing, mobility, social networking, and big data -- while struggling with archaic hardware businesses it has been too slow to sell.
MORE: Buying into big data
In giving up her bonus, Rometty is signaling that she's willing to take responsibility for the transformation of IBM -- what she calls "restless reinvention."
Still, not everything is doom and gloom at the company. IBM reported a record $5.73 quarterly EPS, up 12% for the quarter, which will please shareholders seeking more value from their holdings. Still, that figure doesn't always provide insight into the company's ability to grow in the future. IBM's board authorized a $15 billion authorization for share repurchase last October, so it's likely the company can continue this strategy. Meanwhile, IBM's software business grew 4%. The company's service backlog is $143 billion.
Sensing trouble, IBM has in recent weeks made additional efforts to get traction in the markets that have eluded it. On Jan. 9, IBM announced a $1 billion investment in a new IBM Watson business unit that will employ 2,000 people in New York and include a $100 million fund to boost innovation within its Watson Developers Cloud. Following this was a Jan. 17 announcement that the company will invest $1.2 billion to expand its global cloud footprint, doubling the company's cloud capacity by building up to 40 new data centers in 2014. In the past four years, IBM has invested more than $7 billion in cloud-related acquisitions.
But IBM's traditional hardware businesses, which the company has moved aggressively to offload over the last decade, continues to weigh it down. The company has revived its efforts to sell its low-end server business. Efforts were reportedly underway to sell the business to Lenovo last spring, but they broke down over price. Lenovo is one of several companies rumored to be in the mix today.
Some of IBM's considerable investment shows early signs of taking hold. At $4.3 billion, the company's cloud business is up nearly 70% for the year, positioning it to be among the top cloud-computing contenders. (According to analyst estimates, competitor Amazon (AMZN) managed $3.2 billion in revenues over the past year, though Amazon does not break out the figure.) According to the company's ambitious 2015 roadmap, IBM will have a $7 billion cloud business by 2015. "IBM is making the investments to be one of the top two or three cloud-based players in the next five years," says IDC Chief Analyst Frank Gens. "Now it'll all hinge on execution."
IBM looks to be positioning itself to be in the top three cloud players in the next five years, along with perhaps Amazon and Microsoft (MSFT). Will it succeed? It will all depend on one word: execution.
Yahoo's chief executive was heavy on the spectacle at this year's Consumer Electronics Show, but it remains to be seen whether the fireworks will translate to revenues.
FORTUNE -- The history of Yahoo (YHOO) CEOs giving keynotes at the annual Consumer Electronics Show in Las Vegas is not exactly stellar.
There was 2010, when Carol Bartz canceled her appearance abruptly with little explanation.
There was 2008, when co-founder Jerry Yang opened with a MOREMiguel Helft, senior writer - Jan 8, 2014 11:04 AM ET
The Canadian phonemaker has seen three management regimes in as many years. Is this the one that will save the company from obsolescence?
FORTUNE -- It has been almost 10 months since the Canadian business mobility company BlackBerry ditched the RIMM ticker symbol for (BBRY), renaming itself after the device that made -- and then lost -- its fortune. That rebranding was Frank Boulben's idea. The French marketing executive showed it to MOREJessi Hempel, writer - Nov 25, 2013 1:15 PM ET
Snapchat struck gold by recognizing that the photo is the new SMS. Can it hold people's attention for more than an instant?
By Jessi Hempel, writer
FORTUNE—I can't figure out what Weng Ian is doing. The two of us are guests at a bridal brunch in Tupelo, Mississippi, standing in the formal living room of a home in which dozens of women in festive attire are packed elbow-to-elbow. Some are chatting MOREJessi Hempel, writer - Nov 20, 2013 2:34 PM ET
The Baltimore-based sports company takes a starting position for the coming wearable technology boom.
FORTUNE -- Under Armour wants to equip you with more than running shoes. The sports apparel company, a giant in sports bras and running shoes and cold weather outfits, has just signed a deal worth up to $150 million to buy the app-maker MapMyFitness.
The company's apps include MapMyRun and MapMyRide, which both draw on GPS technology to let the MOREJessi Hempel, writer - Nov 14, 2013 4:57 PM ET
Big Blue gives third-party developers a crack at its cognitive crown jewel.
FORTUNE -- It has been two years since IBM's latest supercomputer, Watson, beat lowly humans on a special episode of Jeopardy!. Since then, the so-called cognitive system has expanded its vocabulary and expertise, developing into a fledgling yet promising commercial business for the tech giant.
The company has already piloted Watson-based applications in health care and customer service with a handful of MOREMichal Lev-Ram, writer - Nov 14, 2013 11:28 AM ET
|GM raising Corvette prices|
|Everything must go: There's a flood of store closings|
|Albertsons to merge with Safeway|
|Boeing reports wing cracks on Dreamliners|
|Bitcoin matters. Ignore the media circus.|