IBM Moves Clients from Oracle (EMC) (HPQ) (IBM) (MSFT) (ORCL)

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IBM Corp. (IBM) introduced new migration resources to pace up the process to shift clients using Oracle Corp (ORCL) software to IBM software.

This new initiative includes training IBM clients for the IBM software. IBM will also finance the migration process from the Oracle database and software to IBM.

IBM Global Financing is providing zero percent financing of the qualified clients who are ready to shift from Oracle software to IBM software. This move is likely to lower the IT spending of clients.

The clients would be provided with a 12-month interest-free financing, with flexible payment options and certain other terms that will be helpful for them. The financing also includes faster approvals under the zero percent financing scheme and does not include any hardware purchase.

IBM has recently enhanced its IT portfolio, as well as its WebShpere Application Server (WAS). The new version of WAS is designed to increase the client's security and control, while delivering automated enhancement for the installation, maintenance, testing and trouble shooting of business applications.

It also provides support to applications ranging from the desktop to mobile devices, including smartphone and tablet variants like iPad, iPhone, Droid and BlackBerry, among others.

IT clients are choosing IBM’s WebSphere and DB2 software over Oracle Database and Oracle WebLogic. The migration from Oracle based software to IBM based software is primarily due to the growth opportunities and cost effective features that IBM’s IT portfolio offers. Statistically, in 2010, more than 1,000 Oracle Database clients migrated to IBM’s DB2 and more than 400 Oracle WebLogic clients opted for IBM’s WebSphere instead.

IBM in the IT Sphere

IBM has the experience and expertise in managing IT environments of innumerable clients globally and will continue to innovate and revolutionize the client servicing space. IBM’s opportunity pipeline with respect to new technologies, especially those related to cloud computing continues to grow as clients increasingly go for IT-enabled expansion.

Cloud computing has a number of advantages. The cost advantage of sharing resources in particular has resulted in its growing adoption by businesses across a number of industries. However, proper management and usage of the technology are a prerequisite.

The cloud computing market is expected to grow at a CAGR of 40.0% between 2010 and 2015, crossing $7.0 billion in revenues by 2015. Cloud computing leads to improved services and elevated security requirements for companies that use it and IBM’s product portfolio is well positioned to benefit.

IBM remains a heavyweight in the cloud computing market . Its strong cash balance enables IBM to acquire companies with strong intellectual property (IP) assets, which will drive further growth in the upcoming quarters. We have a long-term Neutral recommendation on IBM and are optimistic about its strong fundamentals and robust growth prospects going forward.

However, the competitive landscape includes technology giants, such as Oracle Corp., Hewlett Packard Co. (HPQ), Microsoft Corp (MSFT) and EMC Corp (EMC), all of which have joined IBM in the cloud computing market.

We currently have a Zacks #3 Rank for IBM, which translates into a short-term Hold rating.

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