IBM is reporting double-digit growth in its big iron business for the three months ended in September, despite the fact that the majority of businesses are planning cloud deployments and many are allegedly honing their mainframe exit strategy.
The business reported a 98% increase in revenue for its z line of mainframe computers in terms of constant currency when it released its third quarter results on Wednesday (that is, eliminating the effect of currency fluctuations).
The z16 mainframe was released in April by IBM, which categorises mainframes under its infrastructure line of business, and sales started in the second quarter.
At the time of the z16’s launch, experts in the field predicted that its performance and scalability would open the door for more use of mainframes in hybrid cloud systems. Together with the increase in sales of mainframes, IBM’s revenue from its hybrid infrastructure business increased last quarter.
The infrastructure line of business of IBM, which includes hybrid infrastructure, distributed infrastructure, support, and mainframes, reported total revenue of $3.4 billion for the three months that ended in September, an increase of 23.1% year over year. Particularly, the company’s distributed infrastructure and hybrid infrastructure businesses saw increases of 41% and 21%, respectively.
expansion across all business sectors.
The company’s software division recorded revenue of $5.8 billion, up 14.2% from the previous year. This comprises transaction processing services, enterprise Linux subsidiary Red Hat, automation, AI, and security products and services.
Particularly, revenue from transaction processing increased by 33%, followed by Red Hat’s revenue growth of 18% year over year.
Revenue for security solutions increased by 6%, followed by sales growth for AI and automation of 4% and 3%, respectively.
IBM reported overall revenue of $4.7 billion, up 14% year over year, in the consulting line of business, which includes business transformation, technology consulting, and application operations.
Revenue from application operations and technology consulting both increased by 17%, but revenue from business transformation increased by 14%.
Particularly, revenue from transaction processing increased by 33%, followed by Red Hat’s revenue growth of 18% year over year.
The business has executed seven acquisitions so far in 2022.
In the company’s results call with investors, IBM CFO James Kavanaugh stated, “In terms of uses of cash in the first three quarters, we invested over $1 billion in acquisitions, which was more than offset by proceeds from divested businesses.”
