IBM Strengthens Position in Korea

International Business Machines (IBM - Analyst Report) announced several new customer wins, validating the company’s superior position in the IT market.  IBM has been executing a strategy to accelerate initiatives such as Smarter Planet, Business Analytics and Optimization, and Cloud Computing that will help drive the next cycle of growth and productivity for its clients.

IBM said that it has built Korea's first cloud computing environment for a private sector company, SK Telecom (SKM - Analyst Report), the largest telecommunications company in Korea with over 24 million customers. The new service will enable SK Telecom to offer up to 20 new services such as sports news feeds and a photo service to their customers by the end of 2009. The company’s data center solution and cloud computing initiatives will definitely drive growth.

IBM also announced that Korea's largest credit card company, BC Card, has chosen IBM’s System z mainframe for its low cost of computing, including energy savings, as well as the system's strong disaster recovery capabilities. IBM’s offering will support BC Card’s payment system for 2.62 million merchants and 40 million cardholders.  BC Card chose IBM over Hewlett-Packard (HPQ - Analyst Report) and Oracle (ORCL - Analyst Report).

IBM is expected to get a boost from new mainframe contracts. We expect the next generation mainframe product to be more beneficial for IBM, extending its leadership in energy efficiency, security and resilience.

IBM continues to seek out new alliances and partners for its various products and services. We believe these strong alliances and customer wins will leverage IBM’s global scale and expand margins, thereby creating value for the company.

We maintain our Neutral rating on IBM.

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