Mainframe cycle drives IBM storage revenues upwards

High-end DS8900 storage sales were boosted by IBM z15 mainframe demand and pushed IBM storage sales up three per cent in Big Blue’s fourth 2019 quarter.

As reported in our sister publication The Register, IBM’s Q4fy19 total revenues were $21.8bn, up 0.1 per cent, with the Systems business pulling in $2.6bn, up 18 per cent y/y.

In the earnings call, James Kavanaugh, IBM’s CFO, said: “If you look at Systems, we’re off to a very good start. That segment has always been predicated based on bringing new innovation and value to market. Our z15 and new high-end storage, which we brought the market, both grew nicely. Value proposition resonating. We expect a very strong first half in both of those.“

Within the Systems business results, systems hardware was the main revenue contributor at $2.6bn, up 18 per cent as the z15 mainframe cycle went full tilt, recording a 62 per cent increase y/y. The z15 was announced in September 2019 and this was the first full quarter of its availability. POWER server revenues fell 23 per cent. 

DS89900F.

The high-end DS8900F storage array was also announced in September 2019.

Storage system revenues increased three per cent, and we calculate that at $470m, based on the number we reported a year ago.

There are no separate numbers for IBM cloud storage or storage software, so we can’t judge how well it’s doing in these sections of the market. Howevr, Kavanaugh’s earnings call remarks suggest IBM will have good overall storage results for the next two quarters.

Mainframe lock-in is a great benefit to IBM, albeit declining, and that makes storing mainframe bits, bytes and blocks an uplifting Big Blue business too.

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