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How Partnership with NetScout Could Benefit IBM

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Jul. 25 2018, Published 8:07 a.m. ET

Partnership details

On July 24, IBM (IBM) formed a strategic alliance with NetScout (NTCT). NetScout offers service assurance, security, and business analytics, which could enhance IBM’s telecom analytics solution. The financial terms of the partnership weren’t available. The partnership should help IBM integrate its analytics solution with NetScout’s smart data to provide a holistic view of the telecom business to communications service providers in terms of analyzing customers’ mobile usage.

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The opportunity in the telecom market

The overall telecom industry is facing huge competition. In order to gain a competitive advantage, players are continuously enhancing their service and making huge investments in network speed and customer support. Thus, the new partnership between IBM and NetScout may help these telecom carriers reduce customer churn and improve ARPU (average revenue per user).

Thus, the strategic alliance will likely create an incremental business opening for IBM, as the company can offer bundle product solutions that include NetScout software combined with IBM’s telecom analytics to its clients.

Strategic imperative business performance in fiscal Q2 2018

IBM’s strategic imperative business, which includes analytics and cloud, reported fiscal second-quarter revenue of $10.1 billion, up 15.4% YoY (year-over-year), whereas the mobile business, which is a part of the strategic imperative unit, increased 8.3% YoY to $1.3 billion in the same quarter. The graph above shows revenue growth of IBM’s strategic imperative business in the last five quarters.

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