IBM confirmed that a new model of its Z-series mainframes will arrive “late in the first half” of 2022 and highlighted the new device’s debut as an improved revenue stream for the company’s infrastructure business. .
Chief Financial Officer James Kavanaugh put the release on the roadmap during Big Blue’s fourth quarter 2021 earnings call on Monday. The CFO suggested the new version would have a positive impact on IBM’s revenue, which was $16.7 billion for the quarter and $57.35 billion for the year. The fourth quarter figure increased 6.5% year on year, the annual figure jumped $2.2 billion.
Kavanaugh mentioned the mainframe because big iron revenue fell four points in the quarter, a drop Big Blue attributed to the fact that its last mainframe – the Z15 – appeared in 2019 and the sales cycle has naturally declined after eleven quarters of sales. . But what a sales cycle it was: IBM says the Z15 did better than its predecessor and saw deliveries that can power more MIPS (Millions of Instructions Per Second) than any previous program in the company history*.
A new mainframe always brings an increase in revenue for IBM because many customers are attached to the systems and so upgrades are natural.
Like our sister publication The next platform at reportedthe next Big Blue mainframe looks set to run silicon packs called “Telum” with 22.5 billion transistors, is built on a 7-nanometer process, and will be uniquely adept at handling AI inference workloads.
IBM uses this kind of power to attract new customers to its mainframe ecosystem. Big Blue is also advancing mainframes as great components of a hybrid cloud environment – the new paradigm CEO Arvind Krishna said IBM is focusing on its first day on the job.
On the earnings call, Krishna said IBM customers are “eager to leverage hybrid cloud and artificial intelligence to drive their business forward.” The new mainframe seems to tick both of those boxes.
As IBM investors await the new machine and its impact on Big Blue’s bottom line, they can envision that the fourth quarter saw software revenue rise 8%, consulting revenue climb 13 points, but l Infrastructure Remains Stable and Hybrid Cloud Infrastructure Revenue Drops 12%.
But overall hybrid cloud revenue jumped 16% for the quarter and 20% for the year, to top $20 billion in sales.
Executives suggested that robust storage revenue means IBM’s infrastructure portfolio is in great shape, while Red Hat’s 21% increase in revenue shows the company has in-demand tools for buyers looking for IT automation, security, hybrid cloud, and cloud-native development tools.
Krishna suggested automation could be particularly important for IBM as it sees customers turning to it more often as the COVID-19 pandemic has seen many IT workforce departures. He predicted that the resulting skills shortages would persist through the 2020s. ®
*Yes, it can be a bit strange to measure the success of a product in MIPS, because Moore’s Law means that almost any new computing platform will provide more MIPS than its predecessor.