Business software sales contribute to a very good year for IBM -- ADTmag

Business software sales contribute to a very good year for IBM

By ADT Staff
January 19, 2005

This past year was a good one for the software business, at least if your name is IBM. Big Blue reported its fourth quarter and full-year results this week, and showed good if not spectacular growth in its software businesses. Quarterly earnings, which exceeded Wall Street estimates, according to a New York Times report, topped $3 billion for the first time in IBM’s long history.

While the $3.1 billion in earnings covered all IBM products including hardware and services, the company reported an up quarter for its software group, including its flagship WebSphere J2EE platform.

Software revenues came in at $4.5 billion, according to IBM, which represented an increase of 7 percent (3 percent, adjusting for currency) compared with the fourth quarter of 2003. "Revenues from IBM's middleware brands, which include WebSphere, DB2, Rational, Tivoli and Lotus products, were $3.7 billion, up 8 percent versus the fourth quarter of 2003," according to the company’s report.

However, operating systems revenue was not so spectacular with Big Blue reporting an increase of 1 percent to $693 million compared with the fourth quarter of 2003.

WebSphere continues its winning ways with a reported revenue increase of 18 percent. Tried-and-true DB2 database software was up 15 percent.

Of IBM’s three major acquired software portfolios, Tivoli was the biggest winner with revenue up 25 percent; Rational was up 8 percent and Lotus was up 5 percent.

IBM reported that for the year that ended Dec. 31, 2004, its overall income was $8.4 billion compared to $7.6 billion for 2003.