IBM claims to be making substantial gains in competitive hardware sales against Oracle and Hewlett-Packard, capturing $2.3 billion in hardware systems business from the two rivals in the last two and a half years.
The claims came from IBM CFO and Senior Vice President Mark Loughridge during IBM's second quarter earnings call Monday in which the vendor reported solid sales growth across all of its product and service lines.
IBM reported revenue of $26.7 billion for the quarter ended June 30, up 12 percent from $23.7 billion in the same period one year earlier. Net income was $3.7 billion, a gain of 8 percent from $3.4 billion one year ago.
Sales of hardware systems and technology products grew 17 percent during the quarter to $4.7 billion (from $4.0 billion one year earlier). Revenue from System z mainframes spiked 61 percent year-over-year, while Power System sales grew 12 percent and System x sales increased 15 percent. Revenue from storage systems grew 10 percent.
"We continued our success in competitive takeouts," Loughridge said in a call with financial analysts. "This quarter we had over 250 competitive displacements which resulted in over $300 million in business." The CFO said roughly 60 percent of those competitive wins came at Oracle's expense and 30 percent from Hewlett-Packard.
"Since the beginning of 2009 IBM drove nearly 2,300 competitive displacements for about $2.3 billion of business," Loughridge said. While he added that IBM has "done a good job against the competition," he said some of the increased sales have come from the company's emphasis on growth markets such as China, India and Russia.
He said IBM expects such countries to account for 30 percent of IBM's revenue by 2015 and half of its revenue growth by then.
Sales of software products increased 17 percent in the quarter to $6.2 billion (up from $5.3 billion one year earlier). Sales of WebSphere products surged 55 percent year-over-year while the company reported sales gains for its Information Management (18 percent), Tivoli (9 percent) Lotus (12 percent) and Rational (4 percent) software product lines.
"Once again [software] growth was led by our business analytics portfolio, storage management and business integration," Loughridge said. Sales of business analytics software alone surged 20 percent in the first half of 2011.
But some of that software sales growth also came from acquisitions: Loughridge said the company completed 17 acquisitions totaling more than $6 billion in 2010 and most of those were software companies.
Total revenue from services grew 10 percent during the second quarter. Global Technology Services revenue grew 11 percent to $10.2 billion (from $9.2 billion one year earlier) while Global Business Services revenue increased 9 percent to $4.9 billion (from $4.5 billion one year ago).