IBM announced 4Q revenue of $26.3B (vs. $24.4B in 2005 & $25.66B forecasted by the street for 2006). Earnings came in at $3.54B or $2.31/share. See more details here or here.

All in all, a pretty solid quarter. The stock is down about 4% (sell on news?), although it’s up over 10% in the past 90 days (…why am I even trying to explain the ‘rationality’ of the market?)

A few points:

1] IBM Software grew at 25% (or 21% at constant currency: i.e. if currency exchange rates were fixed to equal their 4Q05 rates)
2] IBM Software grew at about 2x the market growth rate
3] The WebSphere division grew at 22%

So, updating the table below, we see that the track record of strong WebSphere division growth continues. This is where the WebSphere Application Server family, including WAS Community Edition (WAS CE), gets counted. There are other elements including our integration products. But like I said before, the majority of the revenue comes from the App server family, so it’s a good measure IBM’s App Server growth. Is the WebSphere family getting hurt by JBoss? The revenue doesn’t suggest as much. Why? Well, because when we were faced with competition from open source we didn’t ignore them or fight the open source movement. We got involved in the community, and gave our customers more choice, more flexibility and protected their investments.

WebSphere Portfolio Quarterly Revenue Growth:

Quarter Y/Y Qtr Growth From:
1Q04 24% Source
2Q04 N/A Source
3Q04 14% Source
4Q04 18% Source
1Q05 11% Source
2Q05 18% Source
3Q05 14% Source
4Q05 4% Source
1Q06 26% Source
2Q06 17% Source
3Q06 30% Source
4Q06 22% Source

Advice for traditional software vendors hoping to address your customer’s needs with open source and your traditional products:

“Enter the open source game and ensure that customers can choose from a spectrum of products, based on their specific needs and budgets, and that the OSS-based products increase the value of existing and future customer investments in you commercial software.