In a move that is expected to boost its position in the Big Data, Analytics and Cloud computing realm, IBM Corp (IBM - Analyst Report) recently completed the acquisition of Cloudant for an undisclosed amount.
Primarily a database-as-a-service (DBaaS) provider, Cloudant is an expert in data management. A member of opensource database community Apache CouchDBTM, Cloudant’s JSON cloud-based data service has gained significant traction as a prominent NoSQL database for mobile and web application developers in the recent times.
Cloudant is an integral part of IBM's MobileFirst solutions. Per IBM, Cloudant enables Worklight developers quickly create flexible, reliable and scalable apps that include a variety of structured and unstructured data.
As Cloudant technology is used by companies from diversified verticals that include mobile device manufacturers, online learning, retail and healthcare, the acquisition expands IBM’s footprint into low-penetrated markets.
Cloudant will run on SoftLayer platform, which IBM acquired for $2.0 billion in 2013. The acquisition expands IBM’s Big Data, Analytics and Cloud computing portfolio as its data management technology will help clients to quickly build, test, deploy and scale mobile, web as well as cloud apps.
Big Data, Analytics and Cloud computing are the key catalysts expected to drive IBM’s top-line growth over the next couple of years. The company continues to invest in these initiatives. IBM will spend $1.0 billion on cloud-based software development through 2015; in addition to the $1.2 billion investment aimed at building 15 data centers worldwide, as announced in January this year.
IBM will also invest $1.0 billion in Watson Group, which will focus on developing cloud delivered Big-Data services to the market. Along with the $1.0 billion investment, IBM announced the launch of BlueMix, a platform-as-a-service (PaaS) based on its open architecture. IBM’s Power Systems into SoftLayer’s cloud to run Watson Big Data services and its middleware offerings such as WebSphere will be available on SoftLayer. This move will enable software developers to build hybrid cloud apps.
We believe these initiatives will improve IBM’s top-line growth in 2014. The company expects to earn $7.0 billion in revenues from cloud-based services by 2015-end.
Moreover, continuing investments in cloud computing, smarter planet initiative and analytics division will boost software and services revenues, going forward. These investments are expected to deliver at least $50 billion in revenues by fiscal 2015.
However, sluggish IT spending and intensifying competition more established players such as Amazon.com (AMZN - Analyst Report) , Oracle (ORCL - Analyst Report) and Microsoft (MSFT - Analyst Report) in these markets are the primary headwinds.
Currently, IBM has a Zacks Rank #3 (Hold).