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IBM Watson & Sandvik Driven OptiMine Analytics Gains Adoption

Zacks Equity Research

International Business Machines Corporation’s IBM robust platforms to revolutionize mining, developed in collaboration with Sandvik Mining and Rock Technology, are witnessing robust adoption from notable mining companies.

Sandvik Mining and Rock Technology, a business within Sandvik Group, offers equipment tools, technical solutions and services to mining and construction companies. Notably, Sandvik Group has a strong foothold in mining and construction industry on account of strength in its rock excavation and metal cutting equipments.

IBM Watson powered Sandvik’s OptiMine Analytics information management solution leverages IoT (or Internet of Things) and AI (or artificial intelligence) capabilities to synchronize mining processes.

OptiMine Analytics utilizes application and equipment data to provide actionable insights to miners on performance, utility and operating conditions.

IBM anticipates robust adoption of IBM Watson driven OptiMine Analytics to disrupt mining industry, and consequently initiate the fourth industrial revolution, or Industry 4.0.

Notably, shares of IBM have gained 27.5% year to date, outperforming industry’s rally of 26.4%.

Robust Features Favor Adoption

In a bid to transform mining methodologies, IBM is incorporating embedded cognitive capabilities and innovative IBM Design Thinking workshops to develop a robust “Cognitive Value Chain for Mining.”

OptiMine Analytics asset management solution aids in optimizing mining by supporting real-time decision making, forecasting equipment failure, and offering the ability to predict and simulate potential actions.

Notably, IoT censor data empowers miners with real-time visibility of the mining equipment facilitating predictive maintenance analytics and optimization strategies. This drives operational efficiency, which in turn bolsters productivity.

The robust features substantiate rapid adoption of OptiMine Analytics, which has been recently selected by notable mining companies including, Vedanta Zinc International, Hindustan Zinc, Petra Diamonds and Barminco.

Market Prospects Abound

The omnipresent nature of technology is disrupting almost all industries and mining is no exception to the trend. As the world population continues to increase, the rock excavation and mining industry is expanding its boundaries to cater to the rising demand for minerals.

The miners are increasingly incorporating robust technologies to simplify communication at depth and analyze equipment failure and other pitfalls. In fact, per ResearchAndMarkets, smart mining market is expected to witness a CAGR of 9.2% between 2018 and 2024.

Analyst firm IDC expects worldwide IoT spending to be $745 billion in 2019, indicating year-over-year growth of 15.4%. IDC expects the tally to hit $1 trillion in 2022.

Based on IBM Watson’s cognitive capabilities and growing clout of OptiMine Analytics, we believe that IBM-Sandvik collaboration is well poised to gain from the robust growth prospects.

Zacks Rank & Key Picks

IBM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Cadence Design Systems, Inc CDNS, Synopsys, Inc. SNPS and Symantec Corporation SYMC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cadence Design, Synopsys and Symantec have long-term earnings growth rates of 12%, 10% and 7.9%, respectively.

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