Dive Brief:
- IBM plans to launch its next-generation mainframe midyear to bring AI workloads closer to enterprise data, IBM Chairman and CEO Arvind Krishna said Wednesday during a Q4 2024 earnings call.
- The z17 product line rollout follows a historically successful run for its predecessor, launched in 2022. “This has been one of the longest programs and most consistent in terms of revenue growth that we've ever seen,” SVP and CFO James Kavanaugh said of the z16. “It's an instantiation of the value of our enduring platform in a hybrid cloud and AI era.”
- IBM saw infrastructure revenue decline 7.6% year over year to $4.3 billion as the z16’s business cycle tailed off. The company’s software segment revenues grew more than 10% to $7.9 billion and accounted for roughly 45% of IBM’s Q4 business, Krishna said. The company increased revenue by 1% in Q4 to $17.6 billion.
Dive Insight:
As enterprises approached a hardware refresh cycle and generative AI adoption ramped up, IBM offered customers a peek at the engine that will power the next generation mainframe last summer.
The high-capacity Telum II chip and AI-optimized Spyre Accelerator will provide z17 with its processing power, Tina Tarquinio, VP of product management, IBM Z and LinuxONE, told CIO Dive. In October, the company beefed up its AI platform by adding two general-purpose Granite open source models and expanding capabilities for the watsonx coding assistant.
While software and hybrid-cloud solutions eclipsed IBM’s mainframe business, AI cost and data privacy concerns breathed new life into the enterprise workhorse.
Technology executives are bullish on mainframe’s role in AI adoption, according to an Oxford Economics survey of more than 2,500 tech chiefs commissioned by the IBM Institute for Business Value. Kyndryl found similar sentiments among 500 IT executives surveyed for its annual mainframe modernization report.
“We see more opportunities ahead as our infrastructure solutions play a crucial role in helping clients bring AI workloads closer to their data,” Krishna said Wednesday.
AI adoption has already given IBM’s other segments a boost. The company added $1.5 billion in generative AI bookings during Q4, according to Kavanaugh, and saw its data and AI software segment grow 4% year over year.
