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iSeries revenues up for first time in four quarters

It might only be a 1% jump in revenues, but IBM can take solace in the fact that iSeries' revenues haven't slipped any further.

IBM announced Thursday that after four straight quarters in the red, revenues for the iSeries midrange servers increased 1% for the first quarter of 2005.

The jump represents the smallest increase possible, but don't tell that to IBM's iSeries staffers who saw a 17% drop off overall in 2004.

According to Gordon Haff, analyst with Nashua, N.H.-based Illuminata, the iSeries has found itself in a good place as far as its product cycle goes, especially where the Power 5 is concerned. And the iSeries leadership has had a chance to stabilize itself and refocus its efforts on rallying the line's numbers since new general manager Mark Shearer took over in January 2005.

One should be cautious in over interpreting this slight upward push in iSeries growth, according to Haff, but for the time being, the fact that the Q1 results didn't bring bad news is a start.

"In general one quarter, even two quarters of results are data, but they don't constitute a trend," Haff said. "It's too early to say that these results demonstrate that the iSeries is going gangbusters again."

Despite the release of the eServer i5, 2004 was hardly a banner year for the iSeries. After a 7% dip in Q1, Big Blue had high hopes that the release of the i5 in May would spike sales. But users who were on the fence about whether to make the move to the upgraded server stayed there, and revenue dropped 28% for Q2 2004. Sales fell 20% in the third quarter, and by the time the year ended, the 9% drop for Q4 looked almost like a victory.

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Overall, revenues from the Systems and Technology Group totaled $3.9 billion for the quarter.

"It's an improvement," Haff said. "It's always encouraging to at least see some signs of life."

Let us know what you think about the story; e-mail: Luke Meredith, News Writer

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