IBM Corporation IBM recently announced its partnership with Box, Inc. BOX for cloud analytics technology. As per the new deal, both the company’s will integrate their products and services to develop new solutions for the enterprise segment. The targeted verticals will include financial services, health care, law and engineering that are witnessing increased demand for cloud data.
As per the agreement, Box will utilize IBM’s content management, security, analytics and social tools, while IBM will integrate Box capabilities in its enterprise email system — IBM Verse — and its social collaboration platform — IBM Connections.
Further, both the companies will work toward developing content management tools and also use Box technology for IBM MobileFirst for Apple AAPL iOS apps. In addition, IBM Bluemix, the company’s open-source cloud platform will also integrate with Box APIs (application programming interfaces) for the development of new applications.
We believe the partnership will help IBM utilize Box’s storage management in order to promote its cloud business. Notably, for the first time, the online storage firm – Box will allow its customers to use a third party cloud platform for data storage. This way IBM‘s customers in international markets can store their data locally. IBM is a late entrant in the cloud technology space and therefore lags its peers.
Of late, IBM has been focusing on expanding its cloud services. Last year, the company entered into an agreement with Equinix Inc. EQIX to facilitate direct access of its full cloud services to customers. Further, it also entered into a seven-year deal with the world’s largest advertising firm, WPP for a whopping $1.25 billion.
Apart from forming partnerships, the company has also raised its investments to target this market. In February, IBM announced an investment of $1 billion in its storage software portfolio over the next five years. Also, it disclosed an investment of $3 billion over the next four years to set up a new IoT unit as well as a cloud-based open platform for clients and ecosystem partners.
Overall, IBM intends to focus more on analytics and cloud-computing to drive top-line growth and to combat a massive slowdown in hardware sales.
However, intensifying competition from the likes of Oracle ORCL, Hewlett-Packard HPQ, SAP SAP and Microsoft MSFT remains a major headwind. Further, sluggish IT spending particularly for on-premise and data center hardware will continue to hurt IBM in the near term.
IBM currently has a Zacks Rank #3 (Hold).
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