Like EMC, and other hardware firms, IBM has bulked up on the software acquisitions with the latest purchases including FileNet and Internet Security Systems. Wikipedia has a handy list of IBM purchases.
Overall, IBM reported fourth quarter earnings from continuing operations of $2.26 a share. Backing out one time gains, IBM reported earnings of $2.20, a penny better than Thomson Financial estimates. Revenue was up 7 percent to $26.3 billion in the quarter.
While most focus on IBM's services business–up 7 percent from a year ago with revenue of $8.6 billion, the company's software business is starting to make headway.
"Customers are responding to the breadth of our software portfolio," said CFO Mark Loughridge on a conference call. "We've been investing in the software business internally and externally through acquisitions for a long time."
As far as revenue growth goes, IBM's middleware line, including WebSphere, Information Management, Tivoli, Lotus and Rational products, gained 18 percent from a year ago. By product, IBM's WebSphere family was up 22 percent from a year ago and Lotus revenue increased 30 percent.
Add it up and middleware matters. Loughridge also added that IBM was well positioned as companies move toward SOA.