IBM reported first quarter fiscal 2012 earnings late Tuesday, stating revenue of $24.7 billion, a 1 percent year-over-year gain. Net income was $3.1 billion, up 9 percent from the first quarter of 2011. Looking ahead, IBM is more optimistic now about its 2012 prospects than it was at the beginning of the year, thanks largely to growth in its software business.
IBM’s software business had a strong first quarter with revenue of $5.6 billion, up by 5 percent on a year-over-year basis. The bulk of that revenue came from IBM’s middleware business, which represented 62 percent of total software revenues.
In contrast to IBM’s growing software business, its hardware business was down for the quarter. IBM reported Systems and Technology revenue of $3.7 billion, a 7 percent year-over-year decline. IBM System z revenue dropped 25 percent from the first quarter of 2011, in a particular area of weakness.
In contrast, IBM’s POWER based systems generated flat growth as IBM continued to pick up share from its rivals.
“In POWER we had over 250 competitive displacements, which resulted in over $200 million of business,” Loughridge said. “Roughly 60 percent of this business came from HP, with most of the balance from Oracle Sun.”
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IBM Raises 2012 Expectations as Software Biz Booms
Sean Michael Kerner is a senior editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals Follow him on Twitter @TechJournalist.