IBM sees big gains ahead for PureSystems

IBM's PureSystems are expected to drive revenue in the years ahead. The numbers in future quarters will tell the tale.
Written by Larry Dignan, Contributor
IBM is betting that its newly-launched PureSystems will juice revenue for its hardware systems business in the second half.

Big Blue recently launched PureSystems, which are integrated systems by design and aim to pack expertise from IBM's various research and services wonks.

Speaking on an earnings conference call, IBM CFO Mark Loughridge touted Unix displacements and touted PureSystems. Loughridge said that PureSystems was a new class of computing that will drive demand for services and software. "(PureSystems) will start to contribute to our performance in the second half," said Loughridge.

More: IBM Q1 sales light, earnings outlook strong | IBM launches PureSystems, touts integration, flexibility | Can IBM redefine datacenter convergence with PureSystems?

Later on the conference call, Loughridge was asked how PureSystems fit into IBM's overall mix. The question: IT budgets are fixed so if a customer buys PureSystems what are they going to skip from IBM or a competitor. Loughridge said:

Let's look at our IT budget within IBM. We work on the percentage of the IT budget that we're able to move into new content and new opportunity as opposed to just maintaining our existing base of business. That's how we run it. We've been doing this year after year. Why is that relevant in PureSystems? Well, if you look at it in a typical IT department, you could be spending about 70% of that budget on these kind of simple operations and maintenance. We think with PureSystems, you have the opportunity to reduce that over a three-year period by over 50%. That's an enormous contribution to your productivity.

PureSystems is the first new system in two decades to hit this kind of an industry rollout, and we're very confident in it.

The numbers in future quarters will ultimately tell the PureSystems tale.

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