The Systems and Technology segment, which accounts for 13.7% of total revenues, declined the most. Two of the segment’s subcategories, Power Systems and System X, saw sales fall 38% and 18% respectively, most of which was because of a slowdown in demand from growth markets.
The Software segment fared only slightly better, posting revenue growth of 0.6% but reported the highest gross margins of 88%. In this segment, sales from Operating Systems reported a 4% drop while Middleware’s revenues increased 3%.
The Global Technology Services segment declined due to a fall in revenues from existing accounts and low margin contracts. Revenues from the Global Business Services segment improved marginally by 0.4% backed by initiatives like Analytics, Cloud and Smarter Planet.
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