IBM has posted yet another quarter of declining revenue, down 1.1 per cent to $19.1bn and representing the 18th consecutive quarterly fall. Net income slid by a similarly slim margin to $2.85bn.
Sales of hardware fell by 21 per cent to just $1.6bn following the sale of the company's System x x86 server business to Lenovo.
But IBM also admitted that z Systems mainframe revenue was depressed, attributing this to the "product cycle", while the decline of IBM's Power Unix line reflected "the secular decline in Unix", according to chief financial officer Martin Schroeter.
However, the company was keen to point to rising sales of cloud computing products and other "strategic imperatives" that grew strongly, according to Schroeter.
"Our clients are focused on becoming digital businesses, and our strong growth in cloud, security, mobile and across our analytics portfolio reflects this," he said.
IBM reported that sales of analytics software and services, branded or re-branded under the Watson label, totalled $4.8bn out of $8bn in revenue described as "strategic". These areas registered growth of 15 per cent in the quarter.
"This quarter we introduced and expanded Watson platform offerings, including Watson Conversation Service and Watson Virtual Agent for Customer Service. We are training Watson for CyberSecurity, expanding the amount of security data Watson is ingesting," said Schroeter.
"In Watson Health, we launched Watson for Drug Discovery and Watson Health Core. And in Watson IoT, we added new capabilities around blockchain and security to draw insights from billions of sensors embedded in everything from machines to cars to drones to ball bearings to buildings and even to hospitals."
IBM reported that cloud revenue increased by 42 per cent to $3.4bn in the quarter, and that the company is "building the industry's broadest and deepest" cloud platform portfolio. The firm now has 49 "cloud centres" and formed a partnership with Workday during the quarter.
Schroeter attributed the company's rising costs to investments in new cloud computing data centres, which will typically be launched with a low level of use, increasing only as the business ramps up.
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