IBM Announces Earnings; System z Remains a Bright Spot

IBM announced it had a relatively strong fourth quarter in 2008 as well as a robust year overall, at least part of it led by its mainframe systems and software offerings. IBM's fourth-quarter 2008 revenues of $27.0 billion decreased one percent, adjusting for currency, from the fourth quarter of 2007. Revenues from continuing operations for the entire fiscal year 2008 totaled $104 billion, an increase over $99 billion in 2007.

Revenues from the Systems and Technology segment for the fourth quarter of 2008 totaled $5.4 billion, down 16 percent, adjusting for currency. While revenues from System z mainframe server products decreased six percent compared with the year-ago period, total delivery of System z computing power, which is measured in MIPS (millions of instructions per second), increased 12 percent. Revenues from the converged System p server products increased eight percent compared with the 2007 period. Revenues from the System x servers decreased 32 percent, and revenues from the legacy System i servers decreased 92 percent. Revenues from System Storage decreased 20 percent.

Revenues from the Software segment were $6.4 billion, an increase of nine percent, adjusting for currency compared with the fourth quarter of 2007, IBM says. IBM's middleware products, which primarily include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $5.2 billion, up four percent versus the fourth quarter of 2007. Operating systems revenues of $622 million decreased four percent compared with the prior-year quarter.

IBM's Information Management software saw revenue gains of 18 percent during the previous quarter, driven by client demand to manage huge volumes of data being generated across global enterprises, Dan Wardman, vice president of information management for IBM's Mainframe Software division, tells 5 Minute Briefing. "There is no bigger problem facing individuals and organizations today than the reality that they can't keep pace with the information explosion while maintaining their IT expenditures. There is clearly a shift to a model of ‘New Intelligence' to gain control of the information and shifting the agenda to predictive outcomes. Clients must tap into the intelligence of their entire value chain, correlating insights and anticipating opportunities and threats."

Global enterprises "rely on Information Management software such as DB2 for z/OS and IMS to support their critical customer applications and information in their data centers," Wardman adds. "As customers try to gain greater insight into their information, in real time and across the enterprise, there is no better source of information than that which is stored in System z."

IBM also says revenues for its WebSphere family of software products decreased one percent. Revenues from Tivoli software decreased four percent, and revenues from Lotus software, which allows collaborating and messaging by clients in real-time communication and knowledge management, was flat year over year. Revenues from Rational software, integrated tools to improve the processes of software development, decreased one percent compared with the year-ago quarter.

IBM also says that Global Technology Services revenues were up three percent, adjusting for currency to $9.6 billion. Global Financing segment revenues were up five percent, adjusting for currency in the fourth quarter to $660 million.

For more details, visit the IBM Website.