IBM Edge 2013—Next Year in Las Vegas

The IBM storage conference, Edge 2012, stunned this blogger when he walked into the first plenary session and saw over 2000 people.  Pretty impressive for a first-time conference. The sessions were meaty. You can experience some of the best sessions here. This blogger recapped the conference here, on DancingDinosaur’s sister blog, BottomlineIT.

Now IBM has announced plans to do it again next June. IBM Edge 2013 will be at the Mandalay Bay Resort in Las Vegas, June 10-14.  Check the details here. They promise more sessions, more announcements, and more customer presentations.  Expect a dozen or so, maybe more, zEnterprise storage sessions, and more for PureSystems and Power. DancingDinosaur expects to attend but nothing has been firmed up yet.

By now everyone has seen the latest IBM quarterly report (2Q 12), an improvement for sure. Second-quarter net income was $3.9 billion compared with $3.7 billion in the second quarter of 2011, an increase of 6%.

Total revenues for the second quarter of 2012 of $25.8 billion were down 3% (up 1%, adjusting for currency) from the second quarter of 2011.  Said a bullish Ginni Rometty, IBM president and chief executive officer: “Looking ahead, we are well positioned to deliver greater value to a wider range of clients and to our shareholders. Given our performance in the first half and our outlook for the second half, we are raising our full-year operating earnings per share expectations to at least $15.10.” You can check out the IBM 2Q announcement here.

Looking at the hardware and software products, there certainly is reason to expect growth. For hardware revenues from the Systems and Technology segment totaled $4.3 billion for the quarter, down 9% (down 7%, adjusting for currency) from the second quarter of 2011. Total systems revenues decreased 7% (down 5 %, adjusting for currency). Revenues from Power Systems were down 7% compared with the 2011 period but just besting System x where revenues dropped 8%.

Revenues from System z mainframe server products decreased 11% compared with a year earlier. Total delivery of System z computing power, as measured in MIPS, decreased 8%. Revenues from System Storage decreased 4%. The mainframe decline was to be expected. IBM historically refreshes the mainframe every three years so the zEnterprise is due a refresh in 2013, which Jeff Frey confirmed to DancingDinosaur just a few weeks ago.

The new rev, noted Frey, will address some of the current gaps, like partition mobility and live image mobility as well as the usual bigger and faster story. You can see more of DancingDinosaur’s previous discussion with Frey here. At this point, it makes sense for shops to delay refreshing their mainframe hardware unless IBM is offering an incredible deal they cannot refuse.

The picture was better on the software side. Revenues from software were $6.2 billion, flat (up 4%, adjusting for currency) compared with the second quarter of 2011. Revenues from IBM’s key middleware products, which include WebSphere, Information Management, Tivoli, Lotus and Rational products—all products mainframe shops typically use—were $3.9 billion, flat (up 4%, adjusting for currency) versus the second quarter of 2011. Operating systems revenues of $628 million were flat (up 3%, adjusting for currency) compared with the prior-year quarter. The two brightest sports were the WebSphere family of software products where revenues increased 3% year over year and Tivoli, which increased 2%. Information Management software revenues decreased 1%. Revenues from Lotus decreased 8%, and Rational revenue dropped 7%.

As IBM’s CFO Mark Loughridge put it in the announcement: IBM gained market share in its high-end server businesses,  which includes the zEnterprise mainframes. The world needs servers even amidst model cycles and economic challenges so winning the market share battle helps assure future success. IBM’s history is replete with examples of its prospering during lean times. And when the new z arrives, DancingDinosuar expects a pickup to follow.

Postscript to DancingDinosaur’s July 10 piece on the HP Itanium future: HP yesterday won its lawsuit against Oracle, which has been ordered by the court to continue to support its software on the Itanium platform. An appeal will surely follow.

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