International Business Machines Corp
) announced that it will upgrade Circulo K Mexico's IT
infrastructure by deploying its PureSystems applications. Circulo
K Mexico, a convenience store chain-subsidiary, will be using
different applications and products from the PureSystems product
range such as PureFlex System, Pure Application System and
IBM's PureSystems helps clients to create and manage IT
infrastructure platform and provide cloud computing capabilities
in a cost effective and timely manner. By deploying IBM's
industry tested enterprise applications, Circulo K will be able
to serve its customers more efficiently. Previously, Circulo K
) IT platform.
The current deal win bodes well for IBM as the company has
been making significant investments in Mexico and has opened its
seventh office in Merida. The company has invested approximately
$4 million for the Merida office, which is located in the Yucatan
metropolitan zone. IBM already has offices in the Mexico City,
Queretaro, Monterrey, Toluca, Guadalajara and Puebla.
It is noteworthy that IT spending in Latin America is
projected to grow by 6.4% and 9.1% in 2013 and 2014,
respectively, according to Forrester Global Tech Market Outlook.
Moreover, Frost and Sullivan expects IT spending in Latin America
to be grow 7% over the next couple of years, particularly in
Mexico and Brazil. Thus, IBM's initiatives to expand in the
region are expected to be beneficial for the company going
We believe that IBM has a vast product portfolio that will
boost its market share going forward. Moreover, with strong
balance sheet and incremental revenues, the company's strategic
acquisitions and partnerships will have a positive impact in the
Moreover, we believe that IBM remains well positioned for
long-term growth based on its four key growth initiatives:
smarter planet, growth markets, business analytics and cloud
computing. We believe that IBM's strong product pipeline,
expansion into emerging markets and continuous acquisitions will
help it to achieve this target going forward.
However, unfavorable foreign currency, sluggish macro economic
environment and stiff competition from
) are the other headwinds going forward.
Currently IBM has a Zacks Rank #2 (Buy).
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