IBM Aims to Enhance Its Middleware with StrongLoop Acquisition


Oct. 15 2015, Updated 11:08 a.m. ET

IBM aims to expand foothold in enterprise app development space with StrongLoop

Previously in this series, we looked at IBM’s (IBM) acquisition of StrongLoop. StrongLoop uses open source JavaScript programming language, Node.js, to build application software for enterprises.

IBM intends to integrate StrongLoop’s offerings with its WebSphere middleware line. IBM’s WebSphere middleware includes WebSphere, Rational, Tivoli, and others. The addition of Node.js development framework to IBM’s software portfolio will enable it to address a demand from enterprises that are interested in building apps with APIs (application programming interfaces) that can handle vast amounts of data and at the same time connect to the back end with other enterprise applications. IBM’s peer Amazon (AMZN) has been offering a Node.js development platform since 2013.

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IBM stated, “Combining StrongLoop’s tools and services with IBM’s WebSphere and Java capabilities, IBM will help clients bridge Java and Node.js development platforms….Through integration on IBM Bluemix, these Java and Node.js communities will also have access today to many other IBM and third-party services including access to Mobile Services, data analytics and Watson.”

IBM’s middleware will get a push from StrongLoop

IBM’s software segment, which combines middleware and operating systems, reported a 10.1% year-over-year (or YoY) fall in its revenues to $5.8 billion. In constant currency terms, this fall was 3%.

Like IBM, technology giants Microsoft (MSFT) and Oracle (ORCL) generate the majority of their revenues from the sale of perpetual middleware software licenses like Websphere.

IBM considers Node.js to be an important part of the future of enterprise middleware. Marie Wieck, general manager of Middleware at IBM, stated, “Enterprises are focused on digital transformation to reach new channels, tap new business models, and personalize their engagement with clients.”

In March 2015, IBM announced the acquisition of AlchemyAPI to accelerate its cognitive computing applications. AlchemyAPI provides scalable cognitive computing application programming interface (or API) services and deep learning technologies.

You can consider investing in the PowerShares QQQ ETF (QQQ) to gain exposure to the technology sector. The ETF invests about 54% of its holdings in the technology sector.


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