IBM’s strategic imperatives
Although IBM’s legacy mainframes continued to see strong demand, it is the company’s Strategic Imperatives businesses growth that’s generating optimism and excitement from analysts and the overall market (VOO). IBM’s Strategic Imperatives business encompasses cloud, analytics, mobile, social, and security. In Q3 2018, it generated $39.5 billion in revenue, which constituted 49% of the company’s overall revenue in the last 12 months. IBM’s recent partnership deals with Juniper Networks (JNPR) and Vodafone (VOD) were strategically formed to augment the company’s move towards digital transformation.
Red Hat’s strategic buyout to boost IBM
According to RightScale 2018 “State of the Cloud Report,” in 2018, 81% of enterprises had a multi-cloud strategy, and 51% of enterprises planned to have a hybrid cloud strategy. To leverage this trend, IBM, a leader in the hybrid cloud space, announced the acquisition of Red Hat in late October 2018 for approximately $34.0 billion. Through Red Hat, IBM is expected to boost its dominance in the hybrid cloud space and also have access to one of the largest open source developer communities.
Amazon’s (AMZN) AWS (Amazon Web Services) and Microsoft’s (MSFT) Azure are dominant players in the public cloud space. Through Azure Stack, Microsoft is aiming to enhance its position in the hybrid cloud space.