back to article Big Blue bafflement: Anyone in IBM Storage know which way is up?

IBM's storage hardware revenues continued their long-term dive, judging by the corp's latest financial results. It's getting hard to know what to say about this. IBM is supposed to be one of the best-managed corporations in the world and yet, for twenty quarters in a row, its quarterly storage revenues have declined on the …

  1. Erik4872

    Maybe customers are worried...

    Could it be that IBM's storage customers feel that this is the next product line to get Lenovofied?

    IBM has been selling off every division that makes tangible products...PCs, POS systems, printers, servers, chips, etc. etc. The only things that they appear willing to keep are the mainframe and some kind of strange Accenture-style consulting operation. Maybe customers are noticing this and deciding not to end up shuffled off to a new vendor. Or, they could be waiting for the price drop that's sure to occur when Lenovo picks them up.

    1. Paul Crawford Silver badge

      Re: Maybe customers are worried...

      Imagine the (potential) customer's conversation:

      C: So what is special about IBM storage?

      IBM: Er, well, Yes! Its from us, the big computer company you can trust!

      C: How long will you be supporting it?

      IBM: Er, as long as we have a hardware business, were in!

      C: OK...<slowly moves towards to door>

      1. Anonymous Coward
        Unhappy

        Re: Maybe customers are worried...

        Ain't that the sad and sorry truth. I've always loved working on IBM gear as their support people were willing to talk to an off-the-shelf field technician and their documentation something wonderful. How the mighty have fallen.

        BTW, I can understand what Gini is doing even if I loathe the final form IBM will become. Oh, and you'll have to dig up my coffin to get my IBM AT keyboard, 'cause Mom has promised it and my favorite machine (HP Z600) go with me.

    2. StorageBuddhist

      Re: Maybe customers are worried...

      Everyone loves an IBM beat up, but there are some things to remember. 1. The sale of System X was bound to hit storage numbers as well.

      2. The dropping of N Series/Netapp likewise.

      These are planned moves to protect profit by sacrificing revenue.

      Check out the profit. They are doing surprisingly well.

      1. Pascal Monett Silver badge

        Re: protect profit by sacrificing revenue

        That makes absolutely no sense. You cannot profit if you're not making money, unless you are a wizard.

        You can protect profit by cutting loss-makers in your revenue stream, but there is a limit to that. At some point or another, your image as a whole will be impacted if you keep cutting revenue-generators. At some point, people will look at your offerings, remember what you had before, and go order from another company that is not shedding constantly.

        Stability is a prime quality in business. You appear unstable, you will become unstable because people won't trust in you any more.

        1. enormous c word

          Re: protect profit by sacrificing revenue

          The difference between revenue and profit is simply that revenue is money you see and profit is money you keep. Simples. They are not related in any way.

          1. dpk

            Re: protect profit by sacrificing revenue

            If you don't have any revenue, can you ever have a profit ?

    3. Anonymous Coward
      Anonymous Coward

      Re: Maybe customers are worried...

      That is definitely part of it. Some people are worried about IBM's commitment to systems, but I don't think that is the primary issue. The primary issue is that storage prices have just fallen through the floor. Tier one storage is being replaced with good enough, 1.5 and tier two, storage. It is effecting every storage company with a traditional tier one business, IBM, EMC and HDS. IBM just didn't have as much in tier two and NAS storage revenue to cushion that blow as say EMC. IBM largely played in tier one until Storwize came out a few years ago. I don't think, for the large part, people are not buying IBM who used to be buying IBM (there is no wide scale move away from IBM storage). If people just didn't want to talk to IBM about storage, FlashSystem would not be the market leader in all Flash arrays. It is a more of a "that TV that used to cost $2,000 now costs $500" situation.

  2. John Geek
    Facepalm

    earlierr today, I had to install JDK 8 on our IBM Power AIX development server. So I find the download page for it, and read this lovely note:

    NOTE: In IBM 64-bit SDK for AIX® Java Technology Edition, Version 8, the default & required is Java8_64.jre fileset as against to sdk fileset in IBM SDK, Java Technology Edition, Version 6 and earlier versions. Whereas, Java8_64.sdk only contains development files such as javac, header files, etc. Java8_64.sdk depends and therefore pre-reqs Java8_64.jre.

    Who the heck let that piece of garbled incomprehensible junk be put on their public website?!? I mean, I get the gist of it, install JRE before SDK, but really, can't they hire some english-speaking writers ??

    1. Mk4

      That takes me back...

      to trying to read manuals for Taiwanese IBM-PC clone kit in the 90's. :-) How ironic, the master has become the clone.

  3. Anonymous Coward
    Anonymous Coward

    maybe - just maybe

    their storage is becoming slighly less fantastically overpriced...

  4. luis river

    IBM benefit

    It has been written in this blog, IBM is dismantling its hardware division that it produce scarce benefits, this is logical, the companies move for the big margins of benefit and at the moment its division of mainframes is a clear example of cleaned up business and for that reason maintains and promotes it (its growth is of 13%, year on year average.)

  5. Anonymous Coward
    Anonymous Coward

    It has to decline to a level that makes selling it off to the Chinese seem sensible

    As with the other divisions, that turns a long term revenue stream into a short term profit and bumps share values.

    (former IBMer of the non gruntled variety)

  6. Anonymous Coward
    Anonymous Coward

    why?

    IBM largely only ever sold storage to IBM customers.

    IBM customers have been decreasing -= from a hardware perspective - for many years.

    This accelerated with the decline of Unix (AIX, PSeries), iSeries (System I), upon which IBM storage sales were dependent.

    This accelerated further with IBM getting out of the x86 server business.

    Those customers that remain have multiple choices in the market and some very aggressive competitors.

    IBM storage solution set has many features and functions - some of which are innovative - but a lot of those innovations have now been surpassed in application software, virtualization software and so on, negativing the value prop of choosing IBM storage over a lower-priced alternative.

    Pricing: IBM always sold storage at a premium to market, partially because of the markets they were selling into but "cheaper but good enough" now has the panache over "premium brand".

    Changes: IBM's storage is facing tech changes from industry - virtualization, all-flash, hyper-convergence - and the traditional SAN sales are going to continue to decline.

    What did I miss?

    1. Axel Koester

      Re: why? ... Why "expensive" storage gear will live on - ad perpetuum

      An important cost driver for enterprise storage is its extensive testing effort (>50% of the cost) and the critical support structure. This is maybe the "missing" part, besides a supposedly higher margin?

      Putting some fancy code on generic x86 hardware, adding some SSDs and a GUI is the easy part, getting this combo to five nines of availability or beyond, across a fleet of ten to hundred thousand deployments is a totally different story. Midrange storage has done a good job evolving towards tier 1 availability levels, but software-based deployments on arbitrary hardware are quite often far away from that. Why? Because every deployment is the first of its kind, with a combination of adapters, microcodes, drivers or cables never seen before - and thus with yet unseen error combinations showing up. People who tried heavy-duty storage virtualization in software know what I'm talking about.

      But there are also the "good enough" use cases, which are less sensitive to outages or data loss than e.g. bank accounts. A majority of today's cloud-based workloads are of the "good enough" type, and yet cloud service providers run highly standardized environments where the potential multitude of error combinations will be mastered over time. Yet, no cloud bank accounts so far - or only with a hardened storage layer.

      Don't be fooled, there is no such thing as bug-free software (or vulnerability-free), and that includes storage software. This is not a "features" or "fancy redundancy algorithm" discussion, it's only measured in hours of operation and field maturity of each and every new 'arbitrary' setup. For my bank account, I want the opposite: not the latest and greatest, but rather as hardened as possible.

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