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Oh dear, IBM. Storage isn't looking like a cash cow any more, is it?

Quarterly results reveal a six per cent revenue slump

IBM's storage hardware revenues continue falling as growth businesses stay submerged under the declining ones.

In its first quarter of 2016 results, IBM's storage hardware revenues were, at $433.5m, six per cent down year-on-year, continuing the now familiar trend.

This was a billion-dollar-a-quarter business in the fourth quarters of 2010, 2011 and 2012. It did $768m in the fourth quarter of 2015, showing the scale of the fall. IBM's first quarter is traditionally weaker than the preceding fourth quarter.

CFO Martin Schroeter said: "Turning to Storage, hardware revenue was down six percent, which continues to reflect weakness in the overall storage market. We are well positioned to capture the strategic growth areas of Flash, Software Defined Storage and Object Storage – which together grew in the quarter."

IBM bought Cleversafe and its dsNet object storage for $1.3bn in October 2015. Gartner has just ranked the product as number 1 in the overall object storage use case in a Critical Capabilities report.

BigBlue has a FlashSystem announcement on April 27 at which significant all-flash array news is expected. Gartner places IBM as second behind EMC in flash array revenues.

However, we have no independent numbers available to us that show how IBM is doing in software-defined storage. Certainly Spectrum Scale, the old GPFS, is seeing a lot of activity.

Krista Macomber, a senior analyst for Data Center at Technology Business Research, said: "IBM will continue aiming to reduce its reliance on legacy revenue streams and more quickly growing its strategic imperatives revenue. For example, IBM’s hardware business, Systems (formerly Systems and Technology Group) declined 21 per cent year-to-year due to product cyclicality in its mainframe business. IBM, in addition to continuing to adapt the role that core portfolio assets such as hardware play in its corporate initiatives, will focus on growing a steady, ongoing stream of transformation-focused engagements with customers."

Our understanding is that it could take several more quarters before these growth storage products' revenues exceed that of the other, non-growth products, such as, we presume, the DSn000, Storwize and XIV arrays. ®

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