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IBM grows cloud and Smarter Planet business, but services struggle

Cliff Saran

IBM has reported its Smarter Planet business grew 25% and cloud business achieved double-digit growth in 2011, although its systems and technology business shrank 7%.

For the first quarter of 2012, IBM posted a post-tax profit of $3.1bn compared with $2.9bn in the first quarter of 2011, an increase of 7%.

Mainframe sales plummeted 25%, although IBM claimed its revenue based on MIPs (the licensing used for mainframe systems) decreased 5%.

Sales of IBM’s middleware products – which include WebSphere, Information Management, Tivoli, Lotus and Rational products – increased 7% to $3.5bn, an increase of 7% versus the first quarter of 2011. 

Revenues from IBM’s business analytics operations across services, software and hardware segments increased 14%.

Ginni Rometty, IBM president and chief executive officer, said: “We delivered another excellent software performance, expanded services margins and continued the momentum in our growth initiatives.”

IBM’s services division struggled in the quarter. Its Global Technology Services segment revenues increased 2% to $10bn. Global Business Services segment revenues were down 2% to $4.6bn.


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