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Cisco and IBM Collaborate to Develop Cybersecurity Solution
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Two IT giants, Cisco SystemsInc. (CSCO - Free Report) and International Business Machines Corporation (IBM - Free Report) recently announced a collaboration to fight against growing instances of cybercrime.
As part of the agreement, Cisco will create applications for IBM's QRadar security analytics platform. Dov Yoran, senior director of strategy and business development at Cisco’s Security Business Group, stated that the deal is divided into three main segments; security products integration, threat information sharing and inclusion of Cisco’s security products in IBM’s product portfolio.
We believe that the partnership comes at an appropriate time as the world just witnessed the impact of ransom ware – WannaCry. Notably, the cyber security market has experienced rapid growth in recent times driven by higher spending from enterprises that are focused on eliminating vulnerabilities in their systems.
Per Cybersecurity Ventures, cybersecurity spending will exceed $1 trillion in the period from 2017 through 2021. According to market research firm Gartner, worldwide spending on information security is expected to reach $90 billion in 2017, an increase of 7.6% over 2016, and to top $113 billion by 2020.
Higher Spending to Benefit Both Companies
Increasing spending on cybersecurity solutions presents significant growth opportunity for both the companies.
Cisco, a prominent player in the Internet Security market will have access to IBM’s huge customer base. On the other hand, IBM can access diverse security products that Cisco has to offer. Thus, the alliance is expected to benefit both the companies.
We believe that this will eventually boost their stock prices, which have underperformed the S&P 500 index on a year-to-date basis. While IBM has lost 6.4%, Cisco has gained 6.1%. However, S&P 500 gained 8.1% over the same time frame.
Collaboration to Boost Top-line Growth
We note that IBM’s Security segment revenues grew around 10% year over year to $500 million in the first-quarter 2017. Cisco, in its recently released third-quarter 2017 results, stated that security revenues saw year-on-year growth of 9% to $527 million. The latest collaboration is expected to boost the numbers further.
The two companies have already worked together during the WannaCry attack and it has been a fruitful effort as they battled misinformation and identified probable solutions to meet the crisis. Notably, security products of the two companies complement each other. Marc van Zadelhoff, the general manager of IBM's security division, in an interview to the Street, stated that IBM's AI-based Watson cybersecurity offerings will benefit from Cisco’s cloud-based products.
The collaboration will also provide a competitive edge to both companies against other key players in the industry like Symantec and Check Point Software (CHKP - Free Report) .
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Cisco and IBM Collaborate to Develop Cybersecurity Solution
Two IT giants, Cisco Systems Inc. (CSCO - Free Report) and International Business Machines Corporation (IBM - Free Report) recently announced a collaboration to fight against growing instances of cybercrime.
As part of the agreement, Cisco will create applications for IBM's QRadar security analytics platform. Dov Yoran, senior director of strategy and business development at Cisco’s Security Business Group, stated that the deal is divided into three main segments; security products integration, threat information sharing and inclusion of Cisco’s security products in IBM’s product portfolio.
We believe that the partnership comes at an appropriate time as the world just witnessed the impact of ransom ware – WannaCry. Notably, the cyber security market has experienced rapid growth in recent times driven by higher spending from enterprises that are focused on eliminating vulnerabilities in their systems.
Per Cybersecurity Ventures, cybersecurity spending will exceed $1 trillion in the period from 2017 through 2021. According to market research firm Gartner, worldwide spending on information security is expected to reach $90 billion in 2017, an increase of 7.6% over 2016, and to top $113 billion by 2020.
Higher Spending to Benefit Both Companies
Increasing spending on cybersecurity solutions presents significant growth opportunity for both the companies.
Cisco, a prominent player in the Internet Security market will have access to IBM’s huge customer base. On the other hand, IBM can access diverse security products that Cisco has to offer. Thus, the alliance is expected to benefit both the companies.
We believe that this will eventually boost their stock prices, which have underperformed the S&P 500 index on a year-to-date basis. While IBM has lost 6.4%, Cisco has gained 6.1%. However, S&P 500 gained 8.1% over the same time frame.
Collaboration to Boost Top-line Growth
We note that IBM’s Security segment revenues grew around 10% year over year to $500 million in the first-quarter 2017. Cisco, in its recently released third-quarter 2017 results, stated that security revenues saw year-on-year growth of 9% to $527 million. The latest collaboration is expected to boost the numbers further.
Cisco Systems, Inc. Revenue (TTM)
Cisco Systems, Inc. Revenue (TTM) | Cisco Systems, Inc. Quote
The two companies have already worked together during the WannaCry attack and it has been a fruitful effort as they battled misinformation and identified probable solutions to meet the crisis. Notably, security products of the two companies complement each other. Marc van Zadelhoff, the general manager of IBM's security division, in an interview to the Street, stated that IBM's AI-based Watson cybersecurity offerings will benefit from Cisco’s cloud-based products.
The collaboration will also provide a competitive edge to both companies against other key players in the industry like Symantec and Check Point Software (CHKP - Free Report) .
Zacks Rank
Cisco and IBM both carry a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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