International Business Machines Corp. (IBM - Free Report) recently announced that Syniverse, a provider of technologies for telecommunication companies, has adopted its cloud services.
During the holiday season, Syniverse witnesses a sudden rise in usage of Short Messaging Service (SMS) and Multimedia Messaging Service (MMS) as more and more consumers share photos or graphics. The seasonal trend has been a headwind for the company, which was solved by using IBM cloud.
Syniverse now uses a hybrid cloud environment using VMware (VMW - Free Report) virtualization solutions on IBM cloud to meet the surge in demand during peak seasons. The setup assists the company to upscale its existing resources and connect to IBM’s public cloud platform if need be.
Moreover, IBM’s environment for testing and integrating new services is an add-on for Syniverse. The company no more needs to create a test environment to meet ever-evolving customer needs.
Shares of IBM have lost 11.3% year to date, underperforming the industry’s decline of 9.7%. We anticipate the rise in adoption of IBM cloud along with its artificial intelligence (AI) platform– Watson to help shares rebound going forward.
Players in the Hybrid Cloud Market
Hybrid cloud infrastructure, which provides flexible and cost effective storage and operations, enjoys an accelerated adoption rate as it can handle variable workload with ease. Per Gartner, by 2020, 90% of the organizations will adopt hybrid infrastructure for cloud storage.
Notably, there has been much advancement in the field of late. DXC Technology Company collaborated with VMware for the deployment of hybrid cloud and Nutanix partnered with Aviatrix for the same. Prior to that Nutanix also entered into a partnership with Alphabet’s Google.
VMware expanded its hybrid cloud strategies and offerings recently. The additions to the portfolio include VMware Discover for providing information technology (IT) insights across all applications. A security product called VMware AppDefense to detect eccentric behavior of the network was also added. Additionally, a network monitoring tool called VMware Network and a public cloud traffic management tool, VMware NSX Cloud were also part of the new features.
We believe, with all these attributes, VMware is a strong contender in the hybrid cloud market. IBM, its public cloud partner, is thus poised to benefit. However, stiff competition from dominant players in the market like Microsoft (MSFT - Free Report) and Amazon (AMZN - Free Report) remains a concern.
IBM currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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