IBM's Software Sales Hammered by Client Shift to Hardware

IBM's recent quarterly results have sent shockwaves through the software industry, as clients are increasingly shifting their spending towards hardware purchases such as memory chips.

The tech giant reported that in the last few weeks of June, clients reprioritized their capital expenditure spend towards servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases.

IBM CEO Arvind Krishna noted that while they anticipated some supply-chain related impact, they did not anticipate the magnitude of the capex reprioritization.

The company's mainframe business, which sells high-end enterprise computers and related software, has been particularly affected by this trend.