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IBM Buys Daeja Image Systems

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International Business Machines (IBM) recently announced its acquisition of privately-held Daeja Image Systems Ltd. The flagship product of Daeja’s “ViewONE Pro” has the capability to display documents in different formats, consisting of TIF, BMP, JPG, GIF, PDF, Excel and PNG. Moreover, ViewONE’s caching capabilities can ensure exceptionally large files can be easily viewed.

By using Daeja’s flagship solution ViewOne Pro, users can open and view documents and images in different file formats, even if the native application is not present on their devices, Daeja’s software also enables viewing of large documents such as medical X-rays, CAD files or photos of automobile accidents offered in various formats.

This acquisition would be especially helpful for IBM, as ViewONE Pro has often been used in combination with IBM FileNet, OpenText and OpenText Vignette, EMC Documentum, as well as Oracle Stellent.

IBM has resorted to acquisitions time and again to gain access to new technology. This strategy has helped IBM to enhance its product portfolio, which ultimately helps in generating incremental revenues, strengthening its technology leadership and resulting in a more favorable mix of business.

In Aug 2013, IBM strengthened its position in the IT security market with the acquisition of Trusteer. The acquisition cost IBM around $700.0 million to $1.0 billion. With this acquisition the company strengthened its solutions offering capability related to financial frauds and other cyber attacks. The takeover helped the company strengthen its technical capability of IBM’s security labs well.

IBM’s strategy of acquiring companies that can be easily integrated into its current business has helped it to expand its product portfolio to higher-growth segments, such as business analytics, IT security, cloud computing and software. The acquisitions have also increased its scale of operations globally.

In fiscal 2012, IBM completed 11 acquisitions for an aggregate cost of $3.96 billion. IBM plans to spend approximately $20.0 billion on acquisitions though 2015, which is expected to boost top-line growth by approximately 2.0%. We believe that IBM will continue to pursue strategic acquisitions to boost its product portfolio, going forward.

However, IBM is expected to face tough competition from the likes of Oracle Corp. (ORCL), Hewlett-Packard Co. (HPQ) and Microsoft Corp. (MSFT), in the near term.

Currently, IBM has a Zacks Rank #3 (Hold).

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