Posts Tagged ‘IBM’

Software Picks to Play IBM Q1 Trends

April 18th, 2014

Both International Business Machines’ first-quarter total revenue and software revenue slightly missed.

IBM (ticker: IBM) reported revenue of $22.5 billion, down 2% in constant currency, just below consensus of $22.9 billion but a slight improvement from the fourth quarter’s 3% CC decline. Software revenue of $5.66 billion slightly missed consensus of $5.74 billion and grew 2% year-over-year CC, a slight deceleration from the fourth quarter’s 4% growth but not far off from the six-quarter trailing average of 3%. We estimate software organic growth decelerated slightly year-over-year CC to up 1% from our estimate of up 3% in the fourth quarter, but in line with the six-quarter trailing average.

Despite this modest slowing from the fourth quarter’s strong software report, there were several positive takeaways including: a) security overall growing more than 20%; b) double-digit growth in WebSphere [software for service-oriented architecture (SOA) environments]; c) Tivoli [integrated service management (ISM) software] posting high single-digit growth; and d) management guidance for total software and key branded middleware revenue to accelerate through 2014—a positive outlook past the first quarter for software spend in our coverage.

IBM’s security portfolio growth is a good sign for network security vendors Check Point Software Technologies (CHKP), Palo Alto Networks (PANW) and Fortinet (FTNT). Tivoli strength could be positive for storage-software vendor CommVault Systems (CVLT), Symantec’s (SYMC) backup business, and systems management vendors like ServiceNow (NOW) and CA Technologies (CA).

Key branded middleware was stable at 5% CC growth, in line with the fourth quarter’s 6% and a positive for middleware vendors Red Hat (RHT) and Oracle (ORCL). Operating systems’ decline worsened to negative 9% CC from the fourth quarter’s down 2%. IBM reiterated its $1.2 billion SoftLayer investment to expand its data center footprint. These investments in cloud data centers and infrastructure are positive indicators for demand for both OpenStack vendor Red Hat and cloud-management vendor VMware (VMW).

– Michael Turits
– James Wesman

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IBM Exploring Sale of Software-Defined Networking Business

February 3rd, 2014

A week after selling its server business unit to Lenovo, IBM is now exploring the sale of some of its networking assets and may be seeking as much as a $1 billion, sources familiar with the matter tell Re/code.

When Big Blue sold its x86 server unit to Lenovo in a deal worth $2.3 billion last week, included with the deal were several networking products — switches and other goods used to enable connections between servers.

Not included in the sale to Lenovo was another IBM product line focused on software-defined networking. IBM calls it Software Defined Network for Virtual Environments.

SDN is a relatively new networking technology that allows for networks within data centers to be set up and configured quickly using only software, similar to the way that virtual machines are “spun up” within servers. The benefit is that the network becomes more flexible and easier to change without the need to swap out new hardware.

IBM is said to have informally approached several companies in the networking business, including Dell, Hewlett-Packard, Cisco, Juniper and Fujitsu, to gauge interest. As IBM has recently spent big to expand its Watson cognitive computing unit as well as its SoftLayer cloud computing unit, the SDN unit is not seen as strategically important, according to a source familiar with the company’s thinking.

It’s unclear how interested those companies might be in buying the unit. One executive at one of the companies approached, who asked not to be named because the matter is private, said his company would at the very least “take a look in order to understand it.”

Ed Barbini, a spokesman for IBM, had no comment, citing the company’s policy of not commenting on rumors and speculation. Representatives of HP, Dell and Juniper declined to comment. A representative for Fujitsu was not immediately available.

Several SDN startups have materialized in recent years, including Big Switch Networks and Nicira (now part of VMware), with the aim of attacking established networking vendors like Cisco Systems and Juniper.

Meanwhile, those same networking vendors — Cisco and Hewlett-Packard and Dell — have all sought to push various flavors of SDN technology of their own and have helped create different standards around it.

IBM had been involved with a standards effort known as Open Daylight, which garnered support from Cisco and HP among others, but which has not received wide-scale industry backing.

One stumbling block may be the price IBM is seeking. One executive described IBM’s initial asking price of $1 billion as “pretty optimistic.”


IBM appoints new chief of global business partners

January 6th, 2014

IBM veteran Marc Dupaquier has been named as the company’s new general manager of Global Business Partners, CRN has learned.

Dupaquier, who has spent 29 years with IBM, replaces former general manager Mark Hennessy. Dupaquier most recently served as vice president of marketing and strategy at IBM’s Systems and Technology Group. He also served as general manager of IBM’s global midmarket business and head of marketing for IBM Software Group.

Hennessy, who was appointed general manager of Global Business Partners in January of 2012, will take over an as-yet-unannounced role at IBM. Prior to heading up IBM’s partner business, Hennessy served as general manager of IBM’s Northeast Europe business, in addition to several channel management roles.

Dupaquier told CRN that he’s built strong ties with IBM partners over the years in his past roles at Big Blue and will rely on that experience as head of Global Business Partners. In particular, Dupaquier said he will work on helping partners take advantage of IBM’s growing software business, which has seen a number of acquisitions in recent years as well as a shift to the cloud.

“The software business has changed so much,” he said. “There’s the software license business and now the software service business with the cloud, and I think that gives more opportunities for partners.”


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