Posts Tagged ‘Spectrum Storage’

IBM 3Q17 Results Break Consecutive Quarters Losing Streak

November 2, 2017

DancingDinosaur generally does not follow the daily gyrations of IBM’s stock, assuming that readers like you are not really active investors in the company’s stock. That is not to say, however, that you don’t have an important, even critical interest in the company’s fortunes.  As users of Z or Power systems, you want to know that IBM has the means to continue to invest in and advance your preferred platform.  And a 20+ consecutive quarters losing streak doesn’t exactly inspire confidence.

What is interesting about IBM’s latest 3Q17 financials, which ends the string of consecutive revenue losses, is the performance of the Z and storage, two things most of us are concerned with.

Blockchain simplifies near real-time clearing and settlement

Here is what Martin Schroeter, IBM Senior Vice President and Chief Financial Officer said to the investment analysts he briefs: In Systems, we had strong growth driven by the third consecutive quarter of growth in storage, and a solid launch of our new z14 mainframe, now just called Z, which was available for the last two weeks of the quarter.

DancingDinosaur has followed the mainframe for several decades at least, and the introduction of a new mainframe always boosts revenue for the next quarter or two. The advantages were apparent on Day 1 when the machine was introduced. As DancingDinosaur wrote: You get this encryption automatically, virtually for free. IBM insists it will deliver the z14 at the same price/performance of the z13 or less. The encryption is built into the cost of silicon out of the box.

A few months later IBM introduced a new LinuxOne mainframe, the Emperor II. The new LinuxOne doesn’t yet offer pervasive encryption but provides Secure Service Containers. As it was described here at that time: Through the Secure Service Container data can be protected against internal threats at the system level even from users with elevated credentials or hackers who obtain a user’s credentials, as well as external threats.

Software developers will benefit by not having to create proprietary dependencies in their code to take advantage of these security capabilities. An application only needs to be put into a Docker container for Secure Service Container deployment. The application can be managed using the Docker and Kubernetes tools that are included to make Secure Service Container environments easy to deploy and use. Again, it will likely take a few quarters for LinuxONE shops and other Linux shops to seek out the Emperor II and Secure Service Containers.

Similarly, in recent weeks, IBM has been bolstering its storage offerings. As Schroeter noted, storage, including Spectrum storage and Flash, have been experiencing a few positive quarters and new products should help to continue that momentum. For example, products like IBM Spectrum Protect Plus promises to make data protection available in as little as one hour.

Or the IBM FlashSystem 900, introduced at the end of October promises to deliver efficient, ultra dense flash with CAPEX and OPEX savings due to 3x more capacity in a 2U enclosure. It also offers to maximize efficiency using inline data compression with no application performance impact as it achieves consistent 95 microsecond response times.

But probably the best 3Q news came from the continuing traction IBM’s strategic imperatives are gaining. Here these imperatives—cloud, security, cognitive computing—continue to make a serious contribution to IBM revenue. Third-quarter cloud revenues increased 20 percent to $4.1 billion.  Cloud revenue over the last 12 months was $15.8 billion, including $8.8 billion delivered as-a-service and $7.0 billion for hardware, software and services to enable IBM clients to implement comprehensive cloud solutions.  The annual exit run rate for as-a-service revenue increased to $9.4 billion from $7.5 billion in the third quarter of 2016.  In the quarter, revenues from analytics increased 5 percent.  Revenues from mobile increased 7 percent and revenues from security increased 51 percent. Added Schroeter: Revenue from our strategic imperatives over the last 12 months was also up 10% to $34.9 billion, and now represents 45% of IBM.

OK, so IBM is no longer a $100 + billion company and hasn’t been for some time. Maybe in a few years if blockchain and the strategic imperatives continue to grow and quantum catches fire it may be back over the $100 billion mark, but not sure how much it matters.

DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghost-writer. Please follow DancingDinosaur on Twitter, @mainframeblog. See more of his IT writing at technologywriter.com and here.

IBM Insists Storage is Generating Positive Revenue

May 19, 2017

At a recent quarterly briefing on the company’s storage business, IBM managers crowed over its success: 2,000 new Spectrum Storage customers, 1,300 new DS8880 systems shipped, 1500 PB of capacity shipped, 7% revenue gain Q1’17. This appeared to contradict yet another consecutive losing quarter in which only IBM’s Cognitive Solutions (includes Solutions Software and Transaction Processing Software) posted positive revenue.

However, Martin Schroeter, Senior Vice President and Chief Financial Officer (1Q’17 financials here), sounded upbeat about IBM storage in the quarterly statement: Storage hardware was up seven percent this quarter, led by double-digit growth in our all-flash array offerings. Flash contributed to our Storage revenue growth in both midrange and high-end. In storage, we continue to see the shift in value towards software-defined environments, where we continue to lead the market. We again had double-digit revenue growth in Software-Defined Storage, which is not reported in our Systems segment. Storage software now represents more than 40 percent of our total storage revenue.

IBM Flash System A9000

Highly parallel all-flash storage for hyperscale and cloud data centers

Schroeter continued: Storage gross margins are down, as hardware continues to be impacted by price pressure. To summarize Systems, our revenue and gross profit performance were driven by expected cycle declines in z Systems and Power, mitigated by Storage revenue growth. We continue to expand our footprint and add new capabilities, which address changing workloads. While we are facing some shifting market dynamics and ongoing product transitions, our portfolio remains uniquely optimized for cognitive and cloud computing.

DancingDinosaur hopes he is right.  IBM has been signaling a new z System coming for months, along with enhancements to Power storage. Just two weeks ago IBM reported achievements with Power and Nvidia, as DancingDinosaur covered at that time.

If there was any doubt, all-flash storage is the way IBM and most other storage providers are heading for the performance and competitive economics. In January IBM announced three all flash DS888* all flash products, which DancingDinosaur covered at the time here. Specifically:

  • DS8884 F (the F designates all flash)—described by IBM as performance delivered within a flexible and space-saving package
  • DS8886 F—combines performance, capacity, and cost to support a variety of workloads and applications
  • DS8888 F—promises performance and capacity designed to address the most demanding business workload requirements

The three products are intended to provide the speed and reliability needed for workloads ranging from enterprise resource planning (ERP) and financial transactions to cognitive applications like machine learning and natural language processing. Doubt that a lot of mainframe data centers are doing much with cognitive systems yet, but that will be coming.

Spectrum Storage also appears to be looming large in IBM’s storage plans. Spectrum Storage is IBM’s software defined storage (SDS) family of products. DancingDinosaur covered the latest refresh of the suite of products this past February.

The highlights of the recent announcement included the addition of Cloud Object Storage and a version of Spectrum Virtualize as software only.  Spectrum Control got a slew of enhancements, including new cloud-based storage analytics for Dell EMC VNX, VNXe, and VMAX; extended capacity planning views for external storage, and transparent cloud tiering for IBM Spectrum Scale.  The on-premises editions added consolidated chargeback/showback and support for Dell EMC VNXe file storage. This should make it clear that Spectrum Storage is not only for underlying IBM storage products.

Along the same lines, Spectrum Storage added VMware 6 support and the certified vSphere Web client. In the area of cloud object storage, IBM added native NFS access, enhance STaaS multi-tenancy, IPV6 support, and preconfigured bundles.

IBM also previewed enhancements coming in 2Q’17.   Of specific interest to DancingDinosaur readers will likely be  the likely updates to the FlashSystem and VeraStack portfolio.

The company is counting on these enhancements and more to help pull IBM out of its tailspin. As Schroeter wrote in the 1Q’17 report: New systems product introductions later in the year will drive improved second half performance as compared to the first. Hope so; already big investors are cashing out. Clients, however, appear to be staying for now.

DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghost-writer. Please follow DancingDinosaur on Twitter, @mainframeblog. See more of his IT writing at technologywriter.com and here.

 


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