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IBM's Mixed Bag of Storage

IBM's storage revenues declined in its second quarter financial results, released last night, but healthy midrange performance offset the weakness in its high-end storage business. (See IBM Reports Q2 Results.)

The vendor's storage unit, which is part of its Systems and Technology Group, suffered a mixed set of results. Although the overall group, buoyed by strong mainframe performance, saw its revenues rise 3 percent year over year to $5 billion, system storage was down 2 percent.

"While some areas of our business did well, others have room for improvement," explained Mark Loughridge, IBM's CFO, during a conference call last night.

Within IBM's storage business, disk revenues were down 1 percent, although, according to Loughridge, the vendor still held share "led by midrange growth of 15 percent." Tape revenues declined 4 percent during the quarter, and high-end storage revenues were also down, although the CFO pointed to strong performance from IBM's DS8000 family, where revenues grew 10 percent year over year.

Laura Conigliaro, an analyst at Goldman Sachs, warned in a note today that the vendor still needs to overcome some end-user skepticism. "IBM's high-end storage continues to feel the aftereffects of quality problems which have since been resolved, but continue to limit customer interest in the product," she said.

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