) recently announced the takeover of Xtify, a New-York based
mobile marketing service provider for an undisclosed amount. This
is IBM's second acquisition in two days, after the company
acquired The Now Factory on Oct 2.
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Founded in 2009, Xtify provides cloud-based mobile messaging
tools that help marketers target current and prospective
customers and improve in-store traffic and engagement, which in
turn boosts sales. Xtify's cloud-based platform tracks the
movement of e-commerce traffic and helps marketers send
personalized messages about new contents and offers.
Xtify's service can keep track of the movements of traffic
irrespective of whether they are using desktop computers or
smartphones. The company has a significant clientele that
includes the like of Sephora, Disney Stores, The Tribune Group
and 20th Century Fox.
IBM will integrate Xtify into MobileFirst software and smarter
cloud divisions, both of which specialize in offering mobile
advertising solutions. IBM also said that the Xtify service will
run from the datacenters, which the company gained from the
acquisition of SoftLayer in June.
The recent acquisition reflects IBM's continuing focus on
developing its smarter commerce product portfolio. Since 2010,
the company has spent approximately $3.5 billion on acquisitions
to develop its offerings.
Xtify's takeover will expand IBM's reach in the mobile payments
transaction market, which market research firm Gartner expects to
reach $235.4 billion in 2013, up 44.0% from 2012. We believe that
this presents significant growth potential over the long term.
Xtify's acquisition also reflects IBM's commitment to growing its
cloud-based business, one of the four major growth vehicles as
per its 2015 roadmap. The company has invested approximately $6.0
billion on acquiring different cloud based start-ups to expand
its product portfolio.
In fiscal 2012, IBM completed 11 acquisitions for an aggregate
cost of $3.96 billion. IBM plans to spend approximately $20.0
billion on acquisitions though 2015, which is expected to boost
top-line growth by approximately 2.0%. We believe that IBM will
continue to pursue strategic acquisitions to boost its product
portfolio, going forward.
However, IBM is expected to face tough competition from the likes
) in the near term.
Currently, IBM has a Zacks Rank #3 (Hold).