While none of IBM's individual business units managed much growth during quarter, none suffered a significant downturn either, despite the fact that the technology market remains mired in a slump. IBM's Global Services arm posted a 2% increase in year-over-year revenue, to $8.9 billion. Hardware sales decreased 1%, to $6.8 billion, and software revenue fell 3%, to $3.1 billion.
Analysts say IBM's diverse product mix has helped it maintain an even keel during the tech downturn. Lehman Bros. analyst Dan Niles notes that, although IBM remains a leading Unix vendor, its Linux push has helped it maintain a strong presence at the low end of the server market and thus has insulated it from the commoditization that's hurting competitors such as Sun Microsystems while boosting the fortunes of price leader Dell Computer. "IBM is best positioned at the high end," Niles says, "but they are very well hedged by being a strong supporter of Linux."