ibm3 articles
IBM's Mainframe Business Takes a 25% Stock Hit as Customers Blow Budget on AI Hardware
IBM's mainframe sales took a significant hit in Q2 after customers diverted their capital spending toward servers, storage, and memory to secure AI-related hardware ahead of anticipated supply shortages and price increases. This unexpected shift in client priorities, compounded by large deals failing to close on time, caused Infrastructure revenue to fall 7% and triggered a 25%+ drop in IBM's share price. While businesses like Red Hat and Distributed Infrastructure performed well, the quarter highlights how the AI infrastructure boom is disrupting traditional enterprise IT purchasing patterns.
IBM's Mainframe Business Takes a Kicking as Customers Blow Their Budgets on AI Hardware Instead
IBM's mainframe business suffered a sharp decline in Q2 after customers diverted their capital spending toward servers, storage, and memory to secure AI infrastructure ahead of anticipated price increases and supply shortages. This unexpected shift in client priorities, compounded by execution failures and cybersecurity distractions, caused IBM's Infrastructure revenue to fall 7 percent and its share price to drop more than 25 percent. While some areas such as Red Hat and Distributed Infrastructure performed well, the quarter highlights how the AI hardware boom is disrupting traditional enterprise IT spending patterns.
The Unix Ownership Lawsuit That Will Outlive Us All
A decades-old legal dispute over UNIX code ownership has resurfaced, with a company called Xinuos — which acquired SCO's software assets — now suing IBM over claims that Big Blue improperly used SCO-owned code in Linux and its own operating systems. The case originated in 2003 when SCO alleged IBM contributed proprietary UNIX code from the failed "Project Monterrey" collaboration to open-source Linux, and has continued in various forms despite a 2021 settlement between the original parties. A recent hearing revisited familiar arguments about code ownership and licensing rights, with a key question being whether Xinuos even has legal standing to pursue the case at this stage.