IBM Inks Global Data Analytics Agreement with Twitter

International Business Machines Corp. (IBM) has entered into a partnership with micro blogging site Twitter Inc. (TWTR). Per the deal, IBM will integrate Twitter’s data into its own products for predicting market trends for its clients. However, the financial details of the deal were not made public.

Moreover, on account of the partnership both the companies will collaborate to develop unique solutions for specific industries such as banking, consumer products, retail, and travel and transportation. Additionally, IBM is expected to provide special training to some personnel regarding how data from tweets can be interpreted to shape up business decisions.

Disappointed with the recently released dismal third quarter results, IBM’s management abandoned its 2015 roadmap earnings target of $20.00 per share and instead has decided to shift its focus toward near-term growth objectives. This partnership is an effort on the same lines.

Going forward, IBM intends to focus more on newer spheres like analytics and cloud-computing for driving top line growth to combat a massive slowdown in hardware sales.

We believe that this partnership with Twitter will enable IBM to get more customers, which in turn will drive revenues going forward. Earlier in 2014, with the intention of extending its footprint in the fast-growing data analytics market, IBM had partnered Apple (AAPL) to analyze data from Apple’s devices.

We believe that IBM’s investments in cloud computing, Big Data, mobile and security will boost software and services revenues in the long run. The company is known for its research capabilities and the recent investments in chip development are likely to be a positive for the company over the long term.

Moreover, the divestitures of loss making units ensure that these will no longer continue to be a drag on the company’s profit. We believe that though the loss of revenues due to these divestitures will initially hurt the top line, they will eventually improve IBM’s margins in the long run.

However, intensifying competition from the likes of Oracle (ORCL), Hewlett-Packard, SAP and Microsoft remains a major headwind. Further, sluggish IT spending particularly for on-premise and data center hardware will continue to hurt IBM in the near term.

Currently, IBM has a Zacks Rank #4 (Sell).

IBM Corp. (IBM) has entered into a partnership with micro blogging site Twitter Inc. (TWTR). Per the deal, IBM will integrate Twitter’s data into its own products for predicting market trends for its clients. However, the financial details of the deal were not made public.

Moreover, on account of the partnership both the companies will collaborate to develop unique solutions for specific industries such as banking, consumer products, retail, and travel and transportation. Additionally, IBM is expected to provide special training to some personnel regarding how data from tweets can be interpreted to shape up business decisions.

Disappointed with the recently released dismal third quarter results, IBM’s management abandoned its 2015 roadmap earnings target of $20.00 per share and instead has decided to shift its focus toward near-term growth objectives. This partnership is an effort on the same lines.

Going forward, IBM intends to focus more on newer spheres like analytics and cloud-computing for driving top line growth to combat a massive slowdown in hardware sales.

We believe that this partnership with Twitter will enable IBM to get more customers, which in turn will drive revenues going forward. Earlier in 2014, with the intention of extending its footprint in the fast-growing data analytics market, IBM had partnered Apple (AAPL) to analyze data from Apple’s devices.

We believe that IBM’s investments in cloud computing, Big Data, mobile and security will boost software and services revenues in the long run. The company is known for its research capabilities and the recent investments in chip development are likely to be a positive for the company over the long term.

Moreover, the divestitures of loss making units ensure that these will no longer continue to be a drag on the company’s profit. We believe that though the loss of revenues due to these divestitures will initially hurt the top line, they will eventually improve IBM’s margins in the long run.

However, intensifying competition from the likes of Oracle (ORCL), Hewlett-Packard (HPQ), SAP (SAP) and Microsoft (MSFT) remains a major headwind. Further, sluggish IT spending particularly for on-premise and data center hardware will continue to hurt IBM in the near term.

Currently, IBM has a Zacks Rank #4 (Sell).

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