Pitney Bowes Ties Up with IBM, Shares Dip

Zacks

Pitney Bowes Inc. (PBI) announced its collaboration with International Business Machines Corporation (IBM) last Tuesday, for enhancing the hybrid cloud location services. However, the news failed to raise investors’ sentiment and the company’s share price fell nearly 2.7% to close at $25.03 on March 27.

As a third party, Pitney Bowes will be providing location intelligence solutions for IBM’s novel platform-as-a-service – BlueMix. The collaboration is intended to provide in-depth insight to businesses regarding customers’ preference, location and networks so as to enable the firms to deliver improved services.

The company’s location intelligence solutions are availed by diverse businesses to enable better decision-making by visualization of spatial data and correlation between explicit locations and customers.

The BlueMix platform is designed to enhance clients and developers to augment the implementation of hybrid clouds in the businesses. The platform, drawing on the integrated strengths of IBM software, third-party skills and open source technologies, provides development and operations (DevOps) services in the cloud to meet the increasing challenges in the industry.

This deal will provide Pitney Bowes the opportunity to develop a series of potent cloud services for mobile application developers. It will also enable the company to promote its primary solutions, including location-based services, solutions for Internet postage, e-Commerce and parcel management to a wide range of innovators and developers. Moreover, IBM’s application programming interface (API) management is expected to support Pitney Bowes to expand its presence worldwide.

The scope of knowledge that can be gained from the huge data is immense.  This, in turn, can leverage a firm’s business significantly. However, such projects need to have a long-term horizon to deliver substantial results. As such, Pitney Bowes might be able to regain investor confidence in the long run.

At present, Pitney Bowes sports a Zack Rank #1 (Strong Buy). Some other stocks worth consideration in the sector include Lexmark International Inc. (LXK) and Hewlett-Packard Co. (HPQ). While Lexmark International has the same Zacks Rank asPitney Bowes, Hewlett-Packard has a Zacks Rank #2 (Buy).

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