Flash and software-defined boost storage sales for IBM

Storage revenues at IBM end a 22-quarter decline, after rising by seven per cent

Sales of storage hardware and software represent a bright spot in an otherwise downbeat set of figures for IBM's traditional business categories, with storage hardware figures up seven per cent year-on-year and software defined storage revenues rising by double-digit numbers.

The Q1 2017 figures reverse 22 straight quarters of decline in IBM's storage hardware fortunes and indicate that more data centres now view flash storage as a cost effective option for rapid I/O operations.

It is not clear exactly which products are responsible for the upturn in the firm's storage fortunes because of the way the business is segmented.

On an earnings call, Martin J. Schroeter, CFO and SVP, said: "Storage hardware was up seven per cent this quarter, led by double-digit growth in our all-flash array offering. Flash contributed to our storage revenue growth in both mid-range and high end."

Schroeter continued: "In storage, we continue to see the shift in value towards software-defined environments, where we continue to lead the market. We again had double-digit revenue growth in software-defined storage, which was not reported in our Systems segment. Storage software now represents more than 40 per cent of our total storage revenue."

Elsewhere the figures were not so rosy for IBM's traditional lines, with systems revenue (down 16 per cent), hardware (declining 18 per cent) and zSystems servers (registering a whopping 40 per cent drop) among the biggest fallers.

IBM has been moving away from its traditional businesses to focus on "strategic imperatives" (meaning cloud, analytics, mobility and security). These are performing better, but not enough to offset the losses in the company's traditional segments. Overall, revenues from strategic imperatives rose 13 per cent to $7.8bn, while cloud revenues were up 35 per cent to $3.5bn.

"Over the last 12 months, our strategic imperatives together generated nearly $34bn in revenue and now represent 42 per cent of our total revenue," said Schroeter.

IBM recently announced it would open four new data centres in the UK as a result of demand from commercial and public sector customers for cloud services.

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