In a recent press release, IBM (NYSE:IBM) announced new cloud and on-premise offerings as part of its Smarter Commerce initiative. ((IBM Expands Cloud Delivery of Smarter Commerce, IBM)) The new solutions, Commerce-as-a-Service and Social Media Marketing, combine technology from IBM’s acquisitions such as Unica, Coremetrics and Sterling Commerce as well as its own research and development and will help businesses respond in real time to shifting customer preferences. IBM competes with firms like HP (NYSE:HPQ), Dell ( NASDAQ:DELL) and Oracle (NASDAQ:ORCL) in the software and services business.
We currently have a $199 Trefis price estimate for IBM, which is about 15% above the current market price.
IBM Identifies Smarter Commerce as a Huge Opportunity
IBM Smarter Commerce initiative is focused on helping companies more effectively market, sell and secure greater customer loyalty in the era of social networking, mobile computing and online buying. With a majority of consumers making a first purchase based on a digital experience today, it has become critical for companies to be able to detect rapid shifts in online behavior and refine their marketing, sales, customer service and supply chain efforts accordingly.
IBM estimates the Smarter Commerce market opportunity at $20 billion for software alone, growing at double-digit rate.
IBM’s Middleware Software and Global Business Services to benefit
With analytics and optimization at its core, the new solutions can be expected to boost IBM middleware software offerings which we estimate make up a major chunk of IBM’s value at around 40%.
In addition, IBM also announced a new smarter commerce consulting services to help clients define measurable business outcomes and boost adoption of its smarter commerce offerings. The new Center of Competence for Smarter Commerce will be part of IBM Global Business Services and can be expected to positively impact the revenues from the division.
