"Overall, the hardware numbers are disappointing, particularly the flat performance of the System x and Power Systems groups, and the significant revenue ... declines in System z," said Charles King, principal analyst at Pund-IT. "However, you could argue that the overall positive results from IBM software helped to balance out those disappointments and also spotlighted the importance of the software investments the company has made over the past half-decade."

IBM's aggressive pursuit of the growth markets will also help offset sluggish hardware sales, King added.

In the first quarter, IBM's revenue roughly met analysts' forecasts, but profit fell short. The company's earnings of $2.61 per share missed the $2.65-per-share consensus forecast from analysts polled by Thomson Reuters. In after-hours trading late on Tuesday, IBM's shares were down $4.58 at $202.87.

As a result of the first-quarter performance, IBM has revised upward its expectations for full-year earnings, to at least $14.27 per share from its former estimate of at least $14.16.

The past few months have been busy ones for the company.