IBM Launches New Software - Analyst Blog

A leading Information Technology (IT) solutions provider International Business Machines Corp. (IBM) announced a new software portfolio that enriches the overall Web experience.

 

The software focuses on improving communication channels between organizations and their clients over the Web and through mobile devices. The portfolio comprises analytics, social software and commerce facilities that aid organizations in retaining their current customers as well as targeting potential customers successfully.

 

With the rapid increase in use of Internet (approximately 28.7% of global population), organizations are using more and more online services to entice customers. Online transactions continue to grow at a rapid space. Currently, eight out of ten customers shop online at least twice a week.

 

According to the research firm eMerketer, the total number of mobile Internet users is expected to reach 134 million by 2013 as a result of increasing usage of smartphones.

 

According to another research firm ABI, there will be 20 times more data and 40 times more mobile transactions by 2015. The firm expects mobile online shopping to triple annually and rise to $119.0 billion in the same timeframe. Organizations irrespective of their size and scale are finding it difficult to cope with this tremendous growth.

 

IBM is expanding its portfolio of solutions to enable organizations to improve their market presence on the Web and use it as their primary communication channel to reach customers. IBM is teaming up with its business partners such as Ascendant Solutions Inc., Gemini Corp., Infosys Technologies Ltd. (INFY), Ixion, and Perficient Inc. (PRFT) to achieve this expansion.

 

The new software named IBM Customer Experience Suite is expected to create a simple and dynamic Web environment for organizations. This will help customers easily navigate and interact either through a mobile device or a conventional online website.

 

The new software encourages organizations to use blogs, chat forums, videos and social marketing to deliver a personalized service, thereby resolving customer issues in a very short span time.

 

IBM Customer Experience Suite software comprises analytics, social networking, Web content management, portal, mashups and mobile features. This software supports online conversation between different communities and allows business owners to market their products by using different marketing tools such as campaigns and surveys that are delivered through multiple channels.

 

We anticipate that the new software will broaden IBM's client base, particularly in the online advertising and marketing sector over the long term. This will help IBM generate higher revenues.

 

Under a renewed contract, IBM is currently providing support to Lufthansa, which is working on improving its Web presence, with a focus on targeting more airline passengers over the next several years.

 

Moreover, sector specific acquisitions such as Sterling Commerce, Coremetrics and Unica will boost the company's ability to address customer specific needs in this rapidly growing market.

 

IBM continues to proceed with its strategy of accretive acquisitions that and plans to spend approximately $20.0 billion in acquisitions over the next 5 years.

 

We remain positive on the new software launch and expect IBM to become the foremost player in the software market through increased acquisition.

 

However, IBM faces stiff competition from Hewlett Packard Co. (HPQ), Accenture Plc (ACN), Oracle Corp. (ORCL), VMware Inc. (VMW), Google Inc. (GOOG) and Microsoft Corp. (MSFT) in most of its markets.

 

IBM has a Zacks Rank of #3, which implies a Hold rating on a short-term basis (1-3 months). Over the long term (6-12 months), the stock has a Neutral recommendation.