Table:
| ($ in millions) |  |  |  |  |
| --- | --- | --- | --- | --- |
| For the year ended December 31: | 2019 | 2018 | Yr.-to-Yr. Percent Change | Yr.-to-Yr. Percent Change Adjusted for Currency |
| Systems external revenue | $7,604 | $8,034 | (5.3)% | (4.1)% |
| Systems Hardware | $5,918 | $6,363 | (7.0)% | (5.9)% |
| IBM Z |  |  | (1.1) | (0.3) |
| Power Systems |  |  | (13.5) | (12.1) |
| Storage Systems |  |  | (8.9) | (7.6) |
| Operating Systems Software | 1,686 | 1,671 | 0.9 | 2.6 |
Paragraphs:
Systems revenue of $7,604 million decreased 5.3 percent year to year as reported (4 percent adjusted for currency). Systems Hardware revenue of $5,918 million declined 7.0 percent as reported (6 percent adjusted for currency), driven primarily by declines in Power Systems and Storage Systems. Operating Systems Software revenue of $1,686 million grew 0.9 percent as reported (3 percent adjusted for currency) compared to the prior year.
Within Systems Hardware, IBM Z revenue decreased 1.1 percent as reported but was essentially flat adjusted for currency, reflecting the mainframe product cycles. Revenue declined through the first three quarters due to the end of the z14 product cycle, but there was strong growth in the fourth quarter driven by z15 shipments. The z15’s strong performance demonstrates client demand for technology that offers improved data privacy and resiliency in the hybrid cloud environment.
The z15 mainframe’s capabilities extend the platform’s differentiation with encryption everywhere, cloud-native development and instant recovery. In October, we announced OpenShift for IBM Z, bringing together the industry’s most comprehensive enterprise container and Kubernetes platform with the enterprise server
platforms of IBM Z and LinuxONE. IBM Z continues to deliver a high-value, secure and scalable platform for our clients.
Power Systems revenue decreased 13.5 percent as reported (12 percent adjusted for currency) year to year, due to the strong performance during the second half of 2018 driven by Linux and the introduction of the POWER9-based architecture in our mid-range and high-end products.
Storage Systems revenue decreased 8.9 percent as reported (8 percent adjusted for currency) year to year, with improvements in year-to-year performance in the fourth quarter of 2019, driven primarily by the launch of the next generation high-end storage
system DS8900 in November.
Within Systems, cloud revenue of $2.9 billion declined 4 percent as reported and 3 percent adjusted for currency.
Question:
What caused the IBM Z revenue to decline?
Answer: IBM Z revenue decreased 1.1 percent as reported but was essentially flat adjusted for currency, reflecting the mainframe product cycles. Revenue declined through the first three quarters due to the end of the z14 product cycle, but there was strong growth in the fourth quarter driven by z15 shipments.