IBM storage sales rose in the first quarter of 2017, for the first time in more than five years.
IBM snapped a 22-quarter string of storage declines on the strength of flash hardware and software-defined products, according to its earnings report this week. Big Blue didn’t give much detail on its storage revenue numbers, except to say storage hardware increased 7%, with all-flash arrays growing by more than 10% over last year. CFO Martin Schroeter said IBM flash storage drove the hardware surge, across midrange and high-end platforms.
“Storage grew after repositioning for flash across our portfolio,” Schroeter said on the earnings call.
“In storage, we continue to see the shift in value toward software-defined environment, where we continue to lead the market. We again had double-digit revenue growth in software-defined storage, which is not reported in our system segment,” he said. “Storage software now represents more than 40% of our total storage revenue. Storage gross margins are down as hardware continues to be impacted by pricing pressure.”
IBM did not provide figure for its storage revenue, but IDC put IBM’s first quarter storage systems revenue in 2016 at $476 million. That would place its first quarter 2017 hardware revenue slightly above $500 million.
Storage is part of IBM’s systems group. That group’s $1.4 billion revenue in the quarter declined 16%, with Z Systems mainframes and Power Systems servers taking big hits.
The improved storage sales come less than a year after Ed Walsh took over as general manager of IBM storage and software-defined infrastructure. In a February interview with SearchSolidStateStorage, Walsh highlighted flash as a key to IBM’s storage strategy.
“Our portfolio is going to be ‘flash first.’ IBM sells a lot of hybrid block arrays and we’ll obviously continue to give you choices,” Walsh said. “But we definitely see flash becoming pervasive. We also are thinking through flash for every workload, which is why we have multiple flash products.”
The IBM flash storage strategy didn’t start with Walsh. The vendor acquired all-flash pioneer Texas Memory Systems in 2012, and also launched all-flash versions of its traditional storage platforms.
Of course, every other major storage vendor is also fully stocked with all-flash systems, so IBM still has a battle ahead of it. The IBM flash storage portfolio will face fresh challenges. We’re about to enter a new generation of flash products with the advent of NVM Express. Over the next few quarters, we’ll see if the first quarter of 2017 was a turning point or just a blip for Big Blue.