Why IBM Entered into a Data Analytics Partnership with Twitter


Apr. 2 2015, Updated 7:06 p.m. ET

IBM and Twitter announced a partnership

In November 2014, IBM (IBM) advanced its strategy of forming partnerships with its peers when it entered into a partnership with Twitter (TWTR). In this data analytics partnership, IBM will incorporate Twitter’s data into its products for businesses.

To gain diversified exposure to IBM, you can invest in the iShares US Technology ETF (IYW) and the Technology SPDR ETF (XLK). IYW and XLK invest about 4.2% and 3.51% of their holdings in IBM, respectively. As the chart above shows, Twitter’s data licensing revenues increased from $15.1 million in 3Q13 to $41.0 million, a year-over-year growth rate of 171%.

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Basic elements of the deal from IBM’s perspective

With this partnership, IBM will integrate Twitter data along with its cloud analytics tool to increase its accessibility to its customers. Both the companies intend to offer solutions and services for specific business needs like marketing and customer care. As a part of the partnership, IBM will train and certify 10,000 consultants on a global basis to be experts on the Twitter platform.

How this partnership is expected to benefit IBM

According to a report by Business Insider, Facebook (FB) and Twitter ingest approximately 500 times and 12 times more data each day as compared to the New York Stock Exchange, respectively. Twitter is a real-time, public, conversational and global information platform. In this way, its presence is far more reaching than any other data source available.

According to Glenn Finch, the global leader of big data and analytics for IBM GBS, “The unprecedented partnership between IBM and Twitter helps businesses tap into billions of real-time conversations to make smarter decisions.” Along with Twitter data, IBM can easily incorporate customer feedback into decision making and evaluate the demand in various industries ranging from retail to telecommunications to finance.


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