Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IBM's 1Q Server Sales Take A Hit

IBM’s first-quarter server revenue declined across all brands except xSeries in part because of a shift to lower-end systems, the company said Tuesday in its earnings call.

Total revenue for the IBM’s Systems and Technology Group rose 3 percent year over year to $4.4 billion for the first quarter ended March 31. However, zSeries server sales dropped 6 percent, iSeries fell 22 percent and pSeries decreased 9 percent, said IBM CFO Mark Loughridge. xSeries sales jumped 10 percent in the quarter, driven by a 45 percent increase in blade server sales.

“We are seeing strong growth in our lower-margin business,” Loughridge said of the xSeries growth. He added that in the other server brands, IBM saw better performance in the low-end of the product lines than at the higher end.

The Systems and Technology Group also includes microelectronics, which saw a 37 percent revenue gain, and storage, which grew 6 percent.

IBM business partners said the move toward lower-end servers bodes well for their small- and midsize-business customers.

  • 1