Friday, October 09, 2009

Mainframes Remain Lucrative Business for IBM -

More IBM mainframe analysis

Toni Sacconaghi, an analyst for Sanford C. Bernstein, estimates that IBM's direct revenue from sales of its System Z mainframes was about $3.5 billion, or less than 4%, of its $103.6 billion in2008 revenue. However, he said that doesn't include lucrative software contracts worth $9 billion a year or financing business associated with sales of mainframes. It also excludes payments for services involved in setting up the machines and maintaining them.

"It's not a growing business over the last ten years, but it's extremely profitable," Mr. Sacconaghi said. Perhaps 20% of IBM's revenue and 40% of its operating profit are mainframe related, he said. IBM declined to comment on the analyst's calculations

Mainframes Remain Lucrative Business for IBM -

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