International Business Machines IBM and Cloudera CLDR have entered into an agreement to built go-to-market initiative, which is aimed at bringing big data and AI solutions to users across the open Apache Hadoop ecosystem.
The initiative is aimed at managing big data workloads across multi-cloud, edge architectures and hybrid on-premises to help customers manage their data and access analytical and decision-making applications.
With rapid accumulation of data, enterprises require applications and security to help them arrive at business decisions faster than ever. The collaboration will cater to this need and also provide customized tools that can be deployed on-premise with hybrid cloud environments.
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Per the deal, IBM will be reselling Cloudera Enterprise Data Hub and Cloudera DataFlow to its customers. Meanwhile Cloudera will deploy IBM's Watson Studio and BigSQL. The agreement will expand IBM’s capabilities in big data analytics.
The strategic alliance between the two companies is based on the long-standing relationship between IBM and Hortonworks, which merged with Cloudera in January this year. Notably, IBM and Hortonworks will continue their collaboration made last June to provide enterprises with decision making power based on informative data output sets.
Hortonworks is a well-known developer of enterprise Apache Hadoop. Its Hortonworks Data Platform (HDP) is enterprise quality software that provides users with complete tools for test and quality assurance. HDP basically brings together the most useful and stable versions of Apache Hadoop and related projects into a single tested and certified package.
We believe this collaboration will help IBM’s customers take advantage of the hybrid data architecture, which enables quick decision making.
Apache Hadoop is an open source software which enable businesses to draw insights from huge amount of structured and unstructured data swiftly at a minimal cost. It primarily comprises three main functions, which include storage, processing and resource management.
Notably, software architecture built on Apache Hadoop aid businesses and enterprises process and survey new data sources, consequently arriving at new business insights. It is increasingly becoming a core component of enterprise data management systems as it allows organizations to cost-effectively capture, process and share data in any format and at any scale.
Through this agreement IBM will provide clients an open platform that helps to accelerate analytics, business processes, data processing and predictive capabilities. Additionally, the agreement will help organizations in generating instant results along with vast storage. Consequently, the agreement will improve business performance of its clients.
In the first quarter of fiscal 2019, IBM's revenues from cloud and data platforms increased 2% year over year. Cloud revenues surged 25% year over year. The annual run rate for cloud as-a-service revenues was $7.5 billion. Revenues from Cognitive Applications were up 4% year over year, driven by security, health, supply chain and weather.
Given the alluring capabilities offered by IBM's hybrid cloud infrastructure, the latest deal is likely to bolster the top line, consequently aiding IBM to compete better against peers. The company has been a pioneer when it comes to helping businesses digitally transform and evolve. The tech giant continues to bring innovation to services to aid the enterprises leverage emerging technologies, including the likes of cloud, AI, IoT, among others.
However, rising competition from Amazon’s Amazon Web Services (AWS) and Microsoft Azure in the cloud infrastructure services market is a headwind.
Zacks Rank & Key Picks
IBM carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Match Group, Inc. MTCH and Autohome Inc. ATHM, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Match Group and Autohome have a long-term earnings growth rate of 15.2% and 20.9%, respectively.
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