International Business Machine ( IBM ) recently added another name to its asset list with the acquisition of Fiberlink, which specializes in the development of enterprise mobile management (EMM) solutions.
This acquisition, expected to close this year, reflects IBM's growing focus on the cloud computing business. Fiberlink Communications specializes in mobile management and security. This acquisition will help IBM to offer total mobile management and security solution through IBM MobileFirst, which includes trusted transactions and security intelligence capabilities.
As per the latest forecast published by the industry research firm Fierce Mobile IT, the corporate mobile SaaS market is predicted to grow at a CAGR of 19% to reach $4.7 billion by 2017.
Moreover, another industry research firm CMSWire believes that the U.S. will be the principal regional driver for SaaS in the North American region on the back of strong demand for mobile, cloud and smart technologies and estimated growth of 6.7% for the entire technology sector in the U.S. in 2014.
IBM has resorted to acquisitions time and again to gain access to new technology. This strategy has helped the company to enhance its product portfolio, which ultimately helps in generating incremental revenues, strengthening its technology leadership and resulting in a more favorable mix of business.
IBM's strategy of acquiring companies that can be easily integrated into its current business has helped it to expand its product portfolio to higher-growth segments, such as business analytics, IT security, cloud computing and software. The acquisitions have also increased its scale of operations globally.
IBM will continue to benefit from its new initiatives like cloud computing, smarter planet, business analytics and optimization over the long term. However, stiff competition from Hewlett Packard Co. ( HPQ ), Microsoft Corp. ( MSFT ), and Oracle Corp. ( ORCL ) and sluggish IT spending are the major headwinds going forward.
IBM has a Zacks Rank #3 (Hold).