IBM's New Deal Win in Mexico - Analyst Blog
22 März 2013 - 12:30PM
Zacks
International Business
Machines Corp. (IBM) announced that it will upgrade
Circulo K Mexico’s IT infrastructure by deploying its PureSystems
applications. Circulo K Mexico, a convenience store
chain-subsidiary, will be using different applications and products
from the PureSystems product range such as PureFlex System, Pure
Application System and PureData System.
IBM’s PureSystems helps clients to
create and manage IT infrastructure platform and provide cloud
computing capabilities in a cost effective and timely manner. By
deploying IBM’s industry tested enterprise applications, Circulo K
will be able to serve its customers more efficiently. Previously,
Circulo K was using Dell’s (DELL) IT platform.
The current deal win bodes well for
IBM as the company has been making significant investments in
Mexico and has opened its seventh office in Merida. The company has
invested approximately $4 million for the Merida office, which is
located in the Yucatan metropolitan zone. IBM already has offices
in the Mexico City, Queretaro, Monterrey, Toluca, Guadalajara and
Puebla.
It is noteworthy that IT spending
in Latin America is projected to grow by 6.4% and 9.1% in 2013 and
2014, respectively, according to Forrester Global Tech Market
Outlook. Moreover, Frost and Sullivan expects IT spending in Latin
America to be grow 7% over the next couple of years, particularly
in Mexico and Brazil. Thus, IBM’s initiatives to expand in the
region are expected to be beneficial for the company going
forward.
We believe that IBM has a vast
product portfolio that will boost its market share going forward.
Moreover, with strong balance sheet and incremental revenues, the
company’s strategic acquisitions and partnerships will have a
positive impact in the long run.
Moreover, we believe that IBM
remains well positioned for long-term growth based on its four key
growth initiatives: smarter planet, growth markets, business
analytics and cloud computing. We believe that IBM’s strong product
pipeline, expansion into emerging markets and continuous
acquisitions will help it to achieve this target going forward.
However, unfavorable foreign
currency, sluggish macro economic environment and stiff competition
from Oracle Corp. (ORCL) and EMC
Corp. (EMC) are the other headwinds going forward.
Currently IBM has a Zacks Rank #2
(Buy).
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