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Software sales in the quarter rose 5.5 percent to $5.6 billion in the quarter. Sales of WebSphere middleware products grew 16 percent year-over-year while revenue from information management products were up 5 percent, as were sales of Tivoli software. Sales of Lotus software were flat, however, while Rational software sales increased just 1 percent.
"With this performance, software was a strong contributor to our growth initiatives," said IBM's CFO Loughridge.
IBM reported hefty sales increases in some key initiatives including Smarter Planet (up 25 percent), business analytics (up 14 percent), growth markets such as India and Brazil (up 9 percent), and cloud technology and services (double the 2011 first-quarter sales).
Revenue from IBM's services operations was also lackluster, however. Global Technology Services revenue was $10.0 billion, up 1.7 percent from one year ago, while Global Business Services revenue was down 1.5 percent to $4.6 billion. Loughridge said part of the GBS revenue decrease was due to slower sales in Japan, particularly relating to two delayed contracts.
IBM on Tuesday also disclosed a deal to sell its retail store point-of-sale business to Toshiba for approximately $850 million. The companies expect to complete the transaction late in the second quarter or early in the third quarter of 2012. Under the agreement Toshiba will become a partner in IBM's Smarter Commerce initiative, combining Toshiba's retail IT systems with IBM's retail analysis software and services.