“We’re going to take aggressive structural actions to reposition the business”
Cloud and mainframes: they may seem like an unlikely combination, but they look like the twin pillars of IBM’s future, as Big Blue returned the first quarterly revenue growth in five quarters, reporting earnings of $21.77 billion for its fiscal Q4, 2019.
The numbers, up 0.1 percent on Q4 2018, superficially look uninspiring.
There was much for IBM to be pleased about though, including robust demand for its cloud (up 23 percent for the quarter), with annual cloud revenue of $21 billion.
The company plans to ramp up infrastructure investment as a result, CFO Jim Kavanaugh told analysts late Tuesday: “We’re expanding our cloud data center footprint, and we are taking structural actions to improve our cost competitiveness”.
It was mainframe sales that really stood out though. I
BM Z (its mainframe segment) was up a strong 63 percent in its first full quarter of z15 sales, as customers refreshed their hardware and took advantage of some serious firepower after the latest bit of big iron landed in September.
The z15 can run one trillion secure web transactions per day and is capable of running 2.4 million containers on a single system, IBM boasts.
That’s resulted in a new record, with Kavanaugh noted: “We shipped the highest MIPs (millions of instructions per second) in history this quarter, driven by growth in new workloads. And we’ve already seen broad adoption of the new mainframe across a number of industries and countries.
“For example, we see large financial institutions migrating their global mainframe footprint to z15 as a critical backbone of their environment and cloud-native strategy.”
IBM’s global technology services (GTS) consulting and IT segment did not perform as strongly as liked and Kavanaugh said the company was “going to take aggressive structural actions to reposition the business overall.”