) two most important businesses are middleware software and
technology services, in which it competes with firms like Oracle (
) and Red Hat. The firm is also among the global leaders in
business systems and competes with hardware vendors like HP (
) and Dell (
) in the server market as well as EMC (
) and NetApp (NTAP) in the storage market.
We have a
$185 Trefis price estimate for IBM's stock
, which is about 9% above the current market price. Below we look
at two key business areas that are likely to shape IBM's business
strategy and drive the firm's growth in the future.
1. Business Analytics and Optimization
The research firm IDC predicts that global data volumes will
increase by 29 times over the next 10 years-to 35 zettabytes. (A
zettabyte is a 1 followed by 21 zeros.) With enterprises needing a
way to manage and mine potentially valuable information from this
huge source of data, advanced data analytics will witness increased
IBM has built the world's leading analytics practice, with
world's premier nonacademic mathematics function, leading-edge
software and offerings integrated by industry. With more than 500
analytics patents and several acquisitions the firm has extended
its capabilities beyond any other player in the market. IBM expects
analytics solutions to contribute a mammoth $16 billion to its
revenue by 2015 - providing significant boost to both its
middleware software and service offerings.
2. Smarter Planet Initiative
IBM launched its smarter planet initiative in 2008 to provide
new ways of monitoring, connecting, and analyzing the systems
allowing business, civic and nongovernmental leaders to develop
more efficient ways to manage these systems.
The firm aims to capture new and potentially huge markets (like
utlities, e-commerce etc.) by offering solutions that will
essentially be integrated with its middleware software
platforms. IBM targets Smarter Planet solutions to grow to $10
billion in revenue by 2015.
If IBM manages to successfully extend its software and solution
offerings leveraging its Smarter Planet initiative, its
middleware software business could witness tremendous growth in the
See our full analysis of IBM