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IBM: Long Live the Mainframe

By CIOinsight  |  Posted 10-27-2010 Print
As IBM's latest fiscal quarter results indicate, the company's Systems and Technology Group (STG), led by the mainframe, has shown that the company's hardware business can continue to drive profit.

IBM says the mainframe is back--if it ever left at all.

IBM announced 3Q 2010 net income of $3.6 billion, compared with $3.2 billion for 3Q 2009, an increase of 12 percent driven by significant increases in systems and technology sales and IBM services as well as a boost in growth markets.

Mark Loughridge, IBM's senior vice president and chief financial officer for finance and transformation, said IBM's Systems and Technology Group (STG) had its best quarter in six years. Revenues from IBM's Systems and Technology segment totaled $4.3 billion for the quarter, up 10 percent from the third quarter of 2009. Systems and Technology pretax income was $327 million, an increase of 46 percent. Systems revenues increased 8 percent. Revenues from System x increased 30 percent. Revenues from System z mainframe server products increased 15 percent compared with the year-ago period. Total delivery of System z computing power, as measured in MIPS (millions of instructions per second), increased 54 percent.

Tom Rosamilia, general manager for Power and z System technologies in IBM's Systems and Technology Group says the key factor leading to this growth was the launch of the new IBM zEnterprise System, which shipped in the third quarter. "This growth makes it one of the most successful mainframe introductions in recent years," says Rosamilla. "We also saw strong growth of mainframes in emerging markets." He adds, "The new zEnterprise System represents more than $1.5 billion in IBM research and development and more than three years of collaboration with some of IBM's top clients. It's the most powerful IBM system ever and represents a radical redesign in its ability to allow workloads on mainframe, Power 7 and System x servers to share resources and be managed as a single, virtualized system. That is critical as customers struggle with integrating their data centers."

For more, read the eWeek article IBM: The Mainframe is Back, Baby.


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