Whee! IBM storage hardware revenues just keep sliding and sliding

Big Blue ready to splash the Big Bucks?

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The only way is down, it seems

IBM's storage hardware revenue decline has continued, according to its 2015 first quarter results.

IBM's earnings statement said: "Revenues from System Storage decreased eight per cent (down two per cent, adjusting for currency)."

Remember, this is just the storage hardware business, ignoring storage software products, and if we track it without adjusting for currency fluctuations.

A chart showing the quarterly results by fiscal year, clearly showing four years of obvious decline, is given below. All the colours are only going downwards, sadly for the computing giant.

An eight per cent decline means, according to our calculations, that IBM's storage hardware revenues in the quarter were $464m; 28 per cent of total system hardware sales.

IBM_Quarterly_Storage_HW_revs_to_Q1fy2015

Quarterly storage hardware revenue declines pretty much in lock step

Despite mainframes doing well, with revenues more than doubling, they didn't encourage high-end DS8000 storage array sales to rise enough to be singled out. As is becoming part of a traditional dance, IBM said only FlashSystem and Storwize array sales sparkled strongly:

Our Storage hardware revenue was down two per cent [constant currency], a modest sequential improvement. We again saw strong growth in our Flash Systems.

This growth was offset by the wind down of our OEM business and continued price weakness in high-end disk.

We see value in the storage market shifting to software and in the first quarter we unveiled IBM Spectrum Storage, new storage software in support of hybrid cloud environments.

There wasn't in fact much new software in Spectrum Storage, it being mostly a re-branding exercise.

However, IBM has said it's investing a billion bucks in this product line, so much more could be coming, and it could make the chart above very short-lived if IBM starts reporting storage software separately.

It looks as if IBM has pretty much given up on its storage hardware, except for the Storwize and FlashSystem and SVC product lines. How demoralising that must be for the folks working elsewhere in the storage hardware product area. ®


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