Credit: Shutterstock photoInternational Business Machines CorporationIBM and Bulgaria's biggest bank, DSK Bank, jointly announced the successful migration of the bank's operations to IBM's datacenters. The migration is a part of the long-term IT services agreement between IBM and the bank.
As part of the deal, IBM will provide after-sales support related to IBM Cloud infrastructure on which the bank's operations run.
Benefits for DSK
DSK Bank has switched to the cloud to enhance its core banking platform as well as introduce new services for over three million individual and business customers.
More specifically, the bank will now be able to better serve the net savvy generation with services such as mobile banking and net banking. Improved security, flexibility and availability of the cloud will help small and big enterprises alike. This transition will also help the elderly residing at remote locations to access the bank's services easily.
International Business Machines Corporation Price and Consensus
International Business Machines Corporation Price and Consensus | International Business Machines Corporation Quote
As per Nikolay Shalamanov, Head of Directorate Operative Maintenance of IT systems, DSK Bank, OTP Group, the transition to cloud is expected to help DSK save up to 20% of its costs annually. Also, the bank's net-banking platform DSK Direct and mobile banking platform DSK Smart run 10% to 15% faster on the cloud. This could translate to customer additions in the future.
How is IBM Poised to Gain?
As per an IDC report, worldwide spending on public cloud services is estimated to reach a whopping $203.4 billion in 2020 at a CAGR of 21.5%. Moreover, Software as a Service (SaaS) is projected to remain the most dominant cloud computing type followed by Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).
Not surprisingly, competition in the sector is intensifying with the presence of major players such as Amazon's AMZN AWS, Microsoft's MSFT Azure and Alphabet's GOOGL Google Cloud Platform.
However, IBM with its strong portfolio of cloud offerings seems poised to take on the competition head on. Also, the company is taking proactive steps in the field of commercializing quantum computing using its cloud platform IBM Cloud. (Read More: IBM to Commercialize Quantum Computing Using Cloud Platform ).
Also, IBM recently partnered with salesforce.com to expand its cloud computing and artificial intelligence platforms. (Read More: IBM and Salesforce Partner to Expand AI and Cloud Computing Platforms ).
These developments place the company in good stead, which could translate to more such client wins in the future.
Stock Performance Overview
Shares of IBM have underperformed the Zacks Computer Integrated Systems industry over the last one year. While the industry gained 33.4%, shares of IBM appreciated 26.4%.
The underperformance of the stock could be due to the time consuming transition to the cloud and weakness in traditional businesses.
At present, IBM carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
