IBM are losing shares rapidly as customers transition to cloud computing, it seems the only escape may be a process called “Mergers and Acquisitions” FBR Capital Markets Daniel Ives said the following:
“It really comes down to M&A. If they went big on big data, cyber security, cloud that’s the only — in our opinion — solution to put fuel in the tank for growth. It’s not going to happen organically,” FBR’s senior analyst told CNBC’s “Squawk Box.”
IBM shares fell more than 5 percent since after-hours trading on Monday and continues to decline! IBM has now had to lower its full-year profit forecast and it seems IBM is going to need to re-think its business plan in a dramatic restructure to be in with a chance of salvaging some value back. IBM is having to shift from making hardware to cloud computing with their main aim is to be established in internet-based software and services sales to compete with companies such as Salesforce.com and Amazon.com’s web software units.
According to Daniel Ives, IBM should consider picking up big data firms like Splunk and Tableau, cybersecurity outfits like Fortinet and CyberArk, and enterprise software companies like Workday and NetSuite. Daniel Ives followed with:
“Big cap tech is in a horse and buggy in the right lane and all these companies are passing them in the Maseratis and Ferraris in the left lane,”
He then made the example regarding Dell’s announced takeover last week of EMC, saying EMC CEO Joseph M. Tucci would not have had to sell had he made acquisitions sooner. Daniel continued on and said the legacy tech companies have become accustomed to blaming their results on currency headwinds, but in the end, earnings come down to core execution and mature products offerings.
IBM’s shares have been declining quite rapidly since April 2013 but nothing in comparison to this scale, despite what IBM is doing to counteract this it clearly has had little effect. Whatever has gone wrong at IBM has gone drastically wrong and IBM needs to be sharp on their toes with a solution before it’s too late.
This is pretty drastic news for the 104-year-old tech giant, one of the first computers I ever used was made by IBM. what are your thoughts on the subject? let us know in the comments below.