IBM’s (NYSE:IBM) new CEO, Virginia Rometty, is betting big on the company’s analytics business for the future. So much so that she recently cited analytics as the single most important focus area for the technology giant in an interview with Bob Moon. Though IBM has now long identified analytics as one of its prime focus area along with cloud computing, growth in emerging markets and Smarter Planet, the interview sheds light on why analytics is probably the most important among them. [1] While IBM has traditionally competed with other enterprise focused firms like HP (NYSE:HPQ), Microsoft (NASDAQ:MSFT) and Oracle (NASDAQ:ORCL), it seems the firm is defining a niche for itself by focusing on next gen analytics; a niche that is truly global is perspective.
We currently have a $187 Trefis price estimate for IBM, almost in-line with the market price.
Smarter Planet is all about Analytics
Last year IBM announced various new solutions for a variety of industries including smarter commerce, smarter cities, and smarter grid, among others as part of its Smarter Planet initiative. At their core these new solutions are all about developing ways to mine data using various sensors or point of contacts and putting it to productive use.
Given that IBM estimates the market opportunities for most of these initiatives at billions of dollars individually, it is hardly surprising that Ms. Rometty sees analytics as the single most important business for the firm.
Cloud capabilities complement Analytics
In addition to focusing on rolling out smarter solutions for traditional industries, IBM is also busy adding cloud capabilities to most of its offerings. While cloud is mostly seen as a means to access data and solutions anytime and anywhere, IBM’s cloud focus is mainly to extend the efficiency of its analytics solutions by allowing real time access to massive data sources.
Watson was not just a stunt
IBM’s Watson supercomputer received some attention last year when it defeated human opponents in the game show Jeopardy. While mostly seen as a publicity stunt at the time, IBM has been quickly leveraging the technology that powered Watson to draw clients in industries like healthcare and scientific research.
With plans to use the analytics capabilities of Watson to come up transportation systems that could predict traffic jams and water systems to instantly pinpoint costly leaks, IBM is working on solutions that could potentially be very valuable and have a truly global application.
Understand How a Company’s Products Impact its Stock Price at Trefis
Notes:- IBM’s new CEO sees gold in data mining, marketplace.org [↩]
