Will the “Third Platform” Provide International Business Machines Corp. (IBM) Much Needed Growth?

Competitive Landscape

The Technology services segment of International Business Machines Corp. (NYSE:IBM) generates the highest revenues. Within this business segment it primarily competes with Accenture Plc (NYSE:ACN) and Hewlett-Packard Company (NYSE:HPQ). Accenture is a massive player in technology and business outsourcing and generates roughly 43% of its revenues through it. The company also has a huge presence in technology and management consulting. It currently has a market cap of $53.5 billion and reported revenues of $27 billion in 2011. Similarly, HP generates its maximum revenues through technology services and infrastructure outsourcing. It has a market cap of $46 billion and reported revenues of $128 billion in 2011. Both companies directly compete with IBM in the technology services domain; nonetheless, IBM has led the two giants so far.

What can the Third Platform Offer Going Forward?

The launch of new initiatives can allow IBM to create more revenue streams. It can enable it to bolster the GBS division by fetching new buyers such as CMO and CFO, leading to a higher contribution in the top line of International Business Machines Corp. (NYSE:IBM). Furthermore, MobileFirst is expected to drive the Middleware Software division of IBM, which will eventually enable it to contribute significantly more to the overall revenues. I expect the new initiatives in mobile computing to facilitate IBM in strengthening its position as a global leader and report positive growth once again in 2013. The integration of various new services will enable IBM to bounce back and report a strong YOY growth in 2013.

The article Will the “Third Platform” Provide IBM Much Needed Growth? originally appeared on Fool.com and is written by Ashit Gulati.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.