Business Technology

Monday 18 December 2017

IBM's got its head in the cloud as it chases data market

IBM - introducing new storage software.
IBM - introducing new storage software.

IBM is introducing new storage software as the company tries to boost sales for higher-margin technology products.

The company's new portfolio, called IBM Spectrum Storage, lets customers use a single dashboard to manage massive amounts of information across existing storage infrastructure, including data centres and the cloud.

IBM also has pledged to spend about $200m a year in the next five years on developing new storage offerings, the company said in a statement.

IBM chief executive Ginni Rometty has been trying to entice customers with new products, such as software-defined storage, to help reverse falling sales.

After 11 quarters of declining revenue, she's still trying to find growth from higher-margin software and services delivered online via the cloud. "We are investing in things that can be growth potential for us," Tom Rosamilia, senior vice president of IBM Systems, said in an interview on Bloomberg Television.

"I actually have to prove it, but we're in a good place." Customers who increasingly rent cloud-computing capacity have cut back on purchasing their own large machines to store data.

Meanwhile, IBM and competitors like EMC have sought to sell more storage that uses faster flash memory, as well as add-on software tools. IBM stopped buying and reselling storage systems from NetApp last year, instead encouraging customers to buy its own products, according to an internal memo reviewed by Bloomberg in May.

Sales from storage systems have fallen for the past three years, taking a 12pc tumble in 2014 from a year earlier.

The hardware division carries a gross profit margin of 39.5pc, compared to the software unit's 88.6pc. The new Spectrum Storage offerings, sales of which will be reported for IBM's software division, will run on storage hardware to help make managing data more efficient, according to the statement. (Bloomberg)

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