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IBM Adds Asset Optimization Capabilities With Oniqua Buyout
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International Business Machines Corporation (IBM - Free Report) recently acquired Oniqua Holdings Pty Ltd. for an undisclosed amount. Oniqua provides Internet of Things (“IoT”) based maintenance, repair and operations (“MRO”) inventory optimization solutions. This buyout will bolster IBM’s Asset Optimization Practice.
IBM’s asset optimization solutions portfolio already comprises Tririga as well as the industry leading Maximo. Meanwhile, Oniqua caters to manufacturing, mining, transportation, oil & gas, utilities and other such asset-intensive industries. The transaction will enable IBM to better serve its existing clients and optimize its operations for higher productivity.
Focal Points of the Acquisition
Per the press release, IBM plans to merge its asset optimization solutions with that of Oniqua’s. Specifically, Oniqua’s flagship service — MRO solution — when combined with IBM’s asset optimization solution Maximo will assist IBM to provide a “Solutions-as-a-Service” based solution.
IBM Services will also gain “a team of professionals” from Oniqua. The MRO and other prescriptive and predictive analytical capabilities of the group will provide IBM a competitive edge in software services market.
With a combined solution platform, IBM looks forward to offer a single data source encompassing business assets to enable a “24/7 operational efficiency.”
Lower Asset Downtime: Key Catalyst
The primary headwind for the asset intensive businesses is annual unscheduled asset downtime. This basically stems from the lack of inventories and spare parts. The insights obtained by scrutinizing and analyzing the business data can diminish unscheduled operational downtime by guaranteeing the optimum material and spare parts required to meet the demand.
IBM remains focused to provide the clientele with a solution primarily aimed at reducing unscheduled asset downtime, which enables these clientsto realize their business goals faster. With Oniqua’s IoT skills in the asset management space, IBM is likely to strengthen its asset optimization capabilities a great deal.
Consequently, businesses will benefit from the smooth connect with the data in real-time. It will enable the clientele to predict equipment failures, consequently shrinking unplanned downtime.
What the Investors Need to Know
IBM’s stock has lost 2.1% of its value over the past year, narrower than the industry’s rally of 2.6%.
The company’s growing clout in the Enterprise Asset Management (EAM) software market is evident from market research firm Gartner’s November 2017 “Magic Quadrant for Enterprise Asset Management Software” report where it put IBM in the “Leaders” quadrant for its Maximo offering. With Oniqua buyout, IBM is likely to reinforce the dominant position it enjoys in the market.
Moreover, per research firm MarketsandMarkets, the EAM market size is anticipated to grow from $3.44 billion in 2017 to $6.05 billion by 2022 at a CAGR of 11.9%. We believe IBM is well poised to capitalize on this lucrative opportunity with the additional IoT-based capabilities Oniqua brings on board.
Strengthening IoT Capabilities Bodes Well
Per IBM’s estimates, there will be around 30 billion connected devices by 2020, thus increasing the need for IoT platforms. Consequently, the company’s investment in the technology seems to be quite well planned. We believe the upcoming new combined solution holds promise.
Considering the benefits, we can anticipate steady growth of the company driven by IoT and artificial intelligence (“AI”) technologies which will eventually help it to compete against peers.
The projected long-term earnings growth rate for Western Digital, Mellanox and Micron are 19%, 15% and 10%, respectively.
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IBM Adds Asset Optimization Capabilities With Oniqua Buyout
International Business Machines Corporation (IBM - Free Report) recently acquired Oniqua Holdings Pty Ltd. for an undisclosed amount. Oniqua provides Internet of Things (“IoT”) based maintenance, repair and operations (“MRO”) inventory optimization solutions. This buyout will bolster IBM’s Asset Optimization Practice.
IBM’s asset optimization solutions portfolio already comprises Tririga as well as the industry leading Maximo. Meanwhile, Oniqua caters to manufacturing, mining, transportation, oil & gas, utilities and other such asset-intensive industries. The transaction will enable IBM to better serve its existing clients and optimize its operations for higher productivity.
Focal Points of the Acquisition
Per the press release, IBM plans to merge its asset optimization solutions with that of Oniqua’s. Specifically, Oniqua’s flagship service — MRO solution — when combined with IBM’s asset optimization solution Maximo will assist IBM to provide a “Solutions-as-a-Service” based solution.
IBM Services will also gain “a team of professionals” from Oniqua. The MRO and other prescriptive and predictive analytical capabilities of the group will provide IBM a competitive edge in software services market.
With a combined solution platform, IBM looks forward to offer a single data source encompassing business assets to enable a “24/7 operational efficiency.”
Lower Asset Downtime: Key Catalyst
The primary headwind for the asset intensive businesses is annual unscheduled asset downtime. This basically stems from the lack of inventories and spare parts. The insights obtained by scrutinizing and analyzing the business data can diminish unscheduled operational downtime by guaranteeing the optimum material and spare parts required to meet the demand.
IBM remains focused to provide the clientele with a solution primarily aimed at reducing unscheduled asset downtime, which enables these clientsto realize their business goals faster. With Oniqua’s IoT skills in the asset management space, IBM is likely to strengthen its asset optimization capabilities a great deal.
Consequently, businesses will benefit from the smooth connect with the data in real-time. It will enable the clientele to predict equipment failures, consequently shrinking unplanned downtime.
What the Investors Need to Know
IBM’s stock has lost 2.1% of its value over the past year, narrower than the industry’s rally of 2.6%.
The company’s growing clout in the Enterprise Asset Management (EAM) software market is evident from market research firm Gartner’s November 2017 “Magic Quadrant for Enterprise Asset Management Software” report where it put IBM in the “Leaders” quadrant for its Maximo offering. With Oniqua buyout, IBM is likely to reinforce the dominant position it enjoys in the market.
Moreover, per research firm MarketsandMarkets, the EAM market size is anticipated to grow from $3.44 billion in 2017 to $6.05 billion by 2022 at a CAGR of 11.9%. We believe IBM is well poised to capitalize on this lucrative opportunity with the additional IoT-based capabilities Oniqua brings on board.
Strengthening IoT Capabilities Bodes Well
Per IBM’s estimates, there will be around 30 billion connected devices by 2020, thus increasing the need for IoT platforms. Consequently, the company’s investment in the technology seems to be quite well planned. We believe the upcoming new combined solution holds promise.
Considering the benefits, we can anticipate steady growth of the company driven by IoT and artificial intelligence (“AI”) technologies which will eventually help it to compete against peers.
Zacks Rank & Key Picks
IBM currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector are Western Digital (WDC - Free Report) , Mellanox and Micron (MU - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The projected long-term earnings growth rate for Western Digital, Mellanox and Micron are 19%, 15% and 10%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>