IBM Continues to Buy Companies for 'Strategic Imperatives' in 2016
IBM’s recent digital acquisitions
Previously in this series, we discussed IBM’s (IBM) recent acquisitions in the digital agency and cloud space. We also noted that how these acquisitions should create synergy by strengthening IBM’s iX (Interactive Experience) position as well as boosting its design expertise. According to Paul Papas, the global leader for IBM iX, iX is an integrated solution for design, business strategy, mobile, systems integration, and technological implementation.
Resource/Ammirati’s acquisition provides an overlap to IBM’s iX as former’s expertise lies in strategy, creative design, and retail or consumer space. Aperto and Ecx.io could help IBM to expand its base in Europe (FEZ). Both companies’ customers depend on them for their website, app, and digital strategy projects.
IBM spent more than $3 billion on acquisitions in 2015
According to BI Intelligence Report and as the above chart shows, funds are rapidly moving from traditional ads toward the digital space. The US media market is rapidly changing due to growth in mobile, video, and social spending.
This explains IBM’s recent acquisitions toward the digital space to further equip itself in mobile and app development. IBM is aggressively pursuing acquisition strategy to find new growth avenues. In 2015, IBM spent more than $3 billion to tuck an additional 14 companies under its umbrella.
Acquisitions could improve IBM’s position in its strategic partnerships
Apart from its aggressive acquisition strategy, IBM is also known for its partnerships. In mid-December 2015, IBM took its partnership with Box one step further since their collaboration in June 2015. Their partnership helped facilitate varied cloud applications to work in sync with each other.
In mid-2015, IBM teamed with Facebook (FB) to develop improved marketing solutions. To enhance its presence in the data analytics space, IBM partnered with Twitter (TWTR) in 2014, under which IBM integrated Twitter data along with its cloud analytics tool to increase its accessibility to its customers.
IBM iX received a boost as the company entered into a strategic collaboration with Apple (AAPL) to build industry-specific mobile apps. The above-mentioned acquisitions should boost IBM’s iX expertise in mobile applications and various digital areas, which should boost IBM’s stance in its partnerships.
Investors who wish to gain exposure to IBM can consider investing in the SPDR S&P 500 ETF (SPY). SPY has an exposure of 8.7% to application software, and it invests ~0.7% of its holdings in IBM.
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