Big Blue said that clients have shifted priorities toward saving capital in recent weeks particularly when it comes to software.

New Chief Executive Officer Arvind Krishna said the shift to remote work is accelerating the move towards cloud services offered by IBM. The company’s hybrid cloud offers combined management of on-premises and remote computers for clients.

Executives said most IBM customers were well positioned for the pandemic and the company would continue to pay dividends.

The company posted quarterly revenue slightly lower than Wall Street expected but beat profit targets as sales in its high-margin cloud computing business rose 19 per cent.

Chief Financial Officer James Kavanaugh IBM has ample free cash flow and liquidity to invest in its business and continue paying dividends.

“We’ve done many different stress tests of our business model, running multiple scenarios around the uncertainties of the duration of the health crisis, but also the rate and pace of recovery around the world”.

Kavanaugh said 70 percent of IBM’s revenue is made up by industries that are predicted to be moderately or minimally impacted by the virus outbreak, including healthcare and telecommunications.

Big Blue is the first US tech major to report quarterly results for the period ending March 31, during which the country’s economy was badly hit as the pandemic kept people indoors.

“Our near-term performance will ultimately be influenced by client buying patterns in this economic environment”, Kavanaugh said.

Revenue from the cloud business rose 19 percent to $5.4 billion in the first quarter.

IBM’s total revenue fell 3.4 percent to $17.57 billion in the reported quarter, slightly below analysts’ estimates of $17.62 billion, according to IBES data from Refinitiv. Excluding the impact from currency and business divestitures, the company recorded a marginal growth in revenue.

IBMNet income fell to $1.18 billion in the quarter ended March 31, from $1.59 billion, a year earlier.