But several analysts expect the mainframe cycle to tail off by the end of the year, creating a challenge for > IBM to maintain its momentum, especially since hardware sales tend to also have a beneficial effect on
revenue in other divisions. Toni Sacconaghi, an analyst at Bernstein Research, estimates that hardware
drives sales of related support services, software, storage and financing that historically have made up
roughly 40% of IBM’s operating profit.
IBM will need to turn around declining revenue in its services businesses to make up the difference,
some analysts said. Those businesses grew around 4.5% in the quarter, reversing their declining
trajectory in recent quarters. Getting those divisions growing consistently is essential to IBM’s long-term
health, according to some analysts.
IBM better have good health insurance. . .
https://www.wsj.com/articles/ibm-reports-higher-revenue-profit-down-1524002507