IBM's 4Q financial report last week brought some interesting revelations -- not the least of which was a 70 percent leap in mainframe sales -- but when it comes to Power Systems, the most important news is that Power Systems hardware sales grew two percent. More importantly, IBM somehow managed to sell out of 520, 720, 740 Entry Systems in the fourth quarter.

These boxes are typically sold to run AIX or IBM i . . . and occasionally both, so it's important to note that sales reflect a mix of operating systems, and that IBM doesn't break out IBM i from AIX and Linux. Overall, the Systems and Technology group at IBM had a fantastic quarter with 21 percent growth. Nice to hear, certainly, but much of that can be pegged to the mainframe action.

Back to Power Systems

Mark Loughridge, IBM’s senior vice president and chief financial officer of Finance and Enterprise Transformation, delivered the report to Wall Street. Here are some of the key Power Systems-related comments: 

"Power Systems grew 2 percent year to year and 6 percent when you combine POWER hardware with our Power System software," Loughridge reported. "We extended our market leadership this quarter -- the 11th consecutive quarter of year-to-year share gains. This was the first quarter with the complete POWER7 product line available. We had strong customer acceptance of the newly introduced entry systems, which grew 30 percent year to year, and we sold out of our 520, 720, and 740 entry systems. Midrange Power grew 7 percent year to year, the third consecutive quarter of growth. And in the fourth quarter we shipped nearly 200 high-end 795 servers, three times as many as third quarter, with strong momentum as we enter 2011."

And what about going after Oracle/Sun and HP?

"Our competitive takeouts continued in the fourth quarter. We drove over 280 competitive unit displacements which resulted in approximately $325 million of business. This is the largest quarter ever for Power competitive displacements. For the year, we had over 1,000 competitive displacements which generated sales of nearly $1 billion. Roughly 60 percent of these wins came from legacy Sun UNIX installed accounts and 30 percent from HP installed accounts. We also drove x86 consolidations to Power, with over 100 competitive wins," Loughridge said.

Later, in response to a question from analyst Robert Cihra from Caris & Company about Power Systems and what appears to be a slow UNIX market, Loughridge offered up a few more shiny nuggets, which you can also find at Seeking Alpha, a financial investment site that does a fantastic job of publishing financial report transcripts. 

"For all of System Technology and for p individually, we're talking about three points of share gain. So that's very strong share performance for the group as a whole and for pSeries individually. But I'd take it at the components of p to better understand how we view the dynamics. So on our new entry p, I mean, we were up 30 percent in the quarter, and even at 30 percent, we were sold out on a number of models. So p, at our entry kind of had very, very strong reception in the marketplace. Our midrange was up 70 percent. Now that's the third quarter that we have had really strong growth in the midrange content that we introduced at the beginning of the year," Loughridge said. 

"Our high-end content, and this high end is one of the -- is the biggest UNIX server in the industry. It does have a longer sell cycle behind it. But if you look at the quarter-to-quarter dynamics, I mean, we did 3x the high-end content in the fourth quarter compared to the third quarter of the year. So we think with that, we have a lot of momentum on all three elements: the entry content, the midrange, and now the high end," he added.

Loughridge also said he thinks Power Systems has a lot of momentum behind it heading into the first quarter of 2011.