IBM: A Dynamic Software Vendor
IBM has acquired more than 100 software companies in the last decade and now its focus is shifting to analytics software.
IBM has acquired more than 100 software companies in the past decade. According to this report on IT Director, the company has invested $12B in 23 analytics-related acquisitions including Cognos, Netezza, SPSS, and OpenPages in the last four.
"Today, IBM is no longer an aggressive tin-shifter nor the services company envisaged by Lou Gerstner, but a dynamic software vendor. In the last decade IBM has acquired 100+ software companies and has software revenues of c. $23Bn and 70,000 employees in its Software Group (it is almost exactly the same size as Oracle). "So why software? The 86% margin IBM gets on software is double what they achieve elsewhere. In addition, as McKinsey points out: 'By pushing their products through a global sales force, IBM estimates it increased their revenues by almost 50% in the first two years after each acquisition and an average of more than 10% in the next three years.' "Analytics is the main thrust. In four years IBM has invested $12Bn in 23 analytics-related acquisitions including Cognos, Netezza, SPSS, and OpenPages. IBMs resulting Business Analytics and Optimization (BAO) practice has 6,000 consultants and 'enables clients to get far more value'."