IBM: Mogul On The Rise Leapfrogs Microsoft (To HP’s Envy)

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Meet IBM, the company HP want to become. The US giant is now a star on the rise, once again – just behind Apple as the most valuable techie in the game.
This major development which saw Microsoft eclipsed as No.2 just last week, after IBM market value hit an all time high of $214 billion, leaving its Windows rival behind with valuations of $213.2bn.

Apple, however, is still ahead of the pack with current market valuation in the region of $360bn plus, although yesterday’s underwhelming iPhone 4S and iPod touch launch may hit share price, which dipped 5% yesterday.

Since the beginning of the year, International Business Machines share prices have jumped 22% higher, and have big plans in the pipeline, which it hopes will push annual revenue up by a whopping $20bn by 2015 and keep the market sweet.

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The giant is planning a series of mergers and acquisitions to fuel growth, in a plan which will cost between $100-300 million,  Senior Vice President Steve Mills has revealed.

And it looks like ambitious IBM is fast becoming the company Hewlett Packard wants to be, focusing on its software business to deliver profit growth.

IBM’s growing software business enjoyed gross margins of 86.9% last year according to Bloomberg, and in June IBM announced its first cloud based service outside its native US, launching LotusLive services in Japan.

And just yesterday, it announced the purchase of software security provider Q1 Labs which provides software for collecting, storing, analyzing log, threat, vulnerability data, will become part of the software mogul’s fledgling security systems division.

IBM shares rose to $174.71 following the Q1 announcement and rose in after hours trading to $175.11.

But IBM, unlike basketcase apparent HP, are looking to keep its house in order and not venture off the beaten path. “Everything’s got to fit,” Mills said. “No spurious, off- to-the-side, unrelated things.”

 

CEO Sam Palmisano also says his company will aim to double or triple sales growth of future acquisitions, according to Wall Street reports.

Analysts are also putting its stratospheric rise down to the dumping of its hardware business Lenovo in 2005 to hone its software and services divisions, now worth $22.5 billion.

“IBM went beyond technology,” Ted Schadler, a Forrester Research analyst told Bloomberg. “They were early to recognise that computing was moving way beyond these boxes on our desks.”

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