Big Blue goes big with Big Data

It looks as if ‘Big Blue’ (a.k.a. IBM) continues to make ‘Big Moves’ in big markets such as cloud computing and big data.  The Companies’ fourth-quarter results were better than expected and Wall Street appears to like the direction and evolution of the Company.

Full article here:

The Company attributes the good financial results to their software businesses.  “IBM beat Wall Street’s estimates in its fourth-quarter results, released after market close, boosted by strength in its software business.”

This transition from a focus on hardware, mainframes and computers has not simply happened overnight.  Neither was it was not happenstance.  The slow evolution to focus on software and services is still in its infancy, in my humble opinion, however the smart people at IBM are much further along than many other companies that are struggling to evolve their businesses.  Take some of the most successful hardware companies of the past such as Hewlett-Packard and Dell in comparison, for example, and notice how they have fallen out-of-favor with customers and the investment community in general.  HP is still debating whether or not to divest their personal computer business or not.  Whereas, Dell is clearly trying to make the transition to higher margin software and services but their direction is not clear.

We achieved record profit, earnings per share and free cash flow in 2012,” said IBM CEO Ginni Rometty in a statement released after market close. “Our performance in the fourth quarter and for the full year was driven by our strategic growth initiatives — growth markets, analytics, cloud computing, Smarter Planet solutions — which support our continued shift to higher-value businesses.”

While this seems promising for IBM in respect to their short-term financial strength it seems as though they are not being passive about their growth plans.  They are aggressively going after high-growth, high-margin emerging market segments (including Big Data) and have been quite local about this as an important objective.

Looking ahead, we continue to invest to deliver innovations for the enterprise in key areas such as big data, mobile solutions, social business and security, while expanding into new markets and reaching new clients,” added Rometty.

I find it humorous to hear all this buzz about big data, mobile and social.  In particular I love when the nay-sayers discount these emerging markets as ‘hype’, or ‘a fad’ or ‘cannot monetize’.  In fact, this incredible doubt by many people that these are viable markets for successful business was the whole purpose of creating and

If the likes of IBM, Google, Apple, HP, Amazon, Salesforce and others are investing billions and billions of dollars on these types of solutions, I have to think there is some legitimacy to these markets.  Afterall, these companies all have enjoyed tremendous success at one time or the other.

 ibm_hpq_dell 4 year chart

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