Although IBM reported pockets of success (like 20% growth in cloud computing) as part of an overall mediocre second quarter, there’s one old product that’s still selling surprisingly well: the mainframe.
Mainframe sales were up 15% this quarter compared to the year-ago quarter in part because IBM introduced a new version of these high-powered, very expensive computers in March, a product line called Z System.
That’s on top of the 30% increase in sales they had in the first quarter.
Now, granted, IBM doesn’t have to sell very many mainframes for revenue to leap (these computers can cost $US1 million), and sales are good in part because companies didn’t buy as many of them last year, while they were waiting for new model to come out.
But the mainframe is a product that has been declared dead many times over many years by the IT industry. In the 1970s it was the standard for computing. Today, companies mostly use smaller, less expensive computer servers for their IT needs.
But for those running extremely computational intensive applications — think financial services, telecommunications, airlines or insurance companies — that have to instantly crunch through huge numbers of transactions, the mainframe remains their go-to computer.
Much to IBM’s benefit.
This chart shows that the only IBM unit to grow revenues significantly in the second quarter was the Systems Hardware business:
This chart shows that the Systems Hardware Segment was greatly buoyed by sales for the Z Systems mainframes.
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