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IBM 2012 Revenue Comes in at $104.5 Billion as Transformation Continues

IBM chases higher quality revenue streams across services, hardware and software.

IBM reported its fourth quarter fiscal 2012 and full year results on Tuesday, showing growth in a number of high-value segments.

For the full year, IBM's revenue came in at $104.5 billion, which is a 2 percent year over year decline. Net Income for the year was reported at $16.6 billion, which is a 5 percent year-over-year gain. IBM's full results were propelled by a strong fourth quarter, with quarterly revenue of $29.3 billion and net income of $5.8 billion.

"Looking at our fourth quarter by segment, our performance was led by continued momentum in our growth initiatives and successful product launches in our high end systems," Mark Loughridge, SVP and CFO of IBM, said during the company's earnings call.

IBM's new mainframe and PureSystems hardware were both cited by Loughridge as being particularly successful. PureSystems are integrated hardware and software offerings that leverage a pattern-based approach to enable application deployment. According to Loughridge, IBM sold over 2,300 PureSystems in 2012 across more than 70 countries.

IBM's MIPS based hardware also grew substantially during the year with year-to year growth of 66 percent.

"This is the largest quarter of MIPS shipments in history," Loughridge said. "About half of these MIPS were specialty engines, driven by Linux workloads, a good indicator of new workloads moving to the platform."

While PureSystems and mainframe technology is doing well, IBM's Power servers are not. Power revenue was down by 19 percent year-over-year. Loughridge noted that IBM will be refreshing the Power portfolio in the first half of 2013.

Software

IBM's software business grew by 4 percent in fourth quarter of 2012, driven by existing brands as well as new acquisition. IBM's WebSphere middleware software grew by 11 percent in the fourth quarter.

"We continue to expand our portfolio to capture the emerging opportunity around mobile computing and saw significant uplift in some of our core WebSphere offerings, such as application servers and commerce," Loughridge said. "As a result, we are well positioned to continue to help enterprises build, connect, run and manage their mobile applications."

Loughridge also highlighted the power of the company's acquisitions in 2012 in supporting IBM's efforts. Overall, Loughridge noted that IBM invested almost $4 billion in 2012 to acquire 11 companies. Those acquisitions are intended to help support IBM's growth initiatives.

"At the same time, we divested our retail store solutions business as we focused our smarter commerce portfolio on the higher value IP-based opportunities," Loughridge said. "So as you can see, in 2012 we continued the transformation of the business, shifting to higher value areas and improving our structure. This results in a higher quality revenue stream."

Looking out to 2013, Loughridge said that IBM will continue on the path of transformation by investing in innovation and acquiring new capabilities.

"Bottom line, we’re continuing to retool our skills and our offerings to shift to higher value and meet our clients’ needs," Loughridge said.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals Follow him on Twitter @TechJournalist.




Tags: IBM, enterprise software, WebSphere


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