I admit I was a little hurt when no one called about what IBM should do to end its painful five-year revenue journey. I offered a lot of suggestions. But the essence of the advice was to triple down on the technologies – cloud/analytics/AI – transforming business models and processes – and run from the old technology world IBM once ruled. I also suggested IBM go on a buying spree even beyond the technology sector. Well, the company’s parachute finally (half) opened. Modest year-over-year revenue growth was reported for Q4 2017 – and the gains were in the right areas (though for other reasons the stock actually fell when the report was released). All of my previous advice, especially about buying revenue (of the right kind), still holds, but now that revenue in the right areas has turned the corner, an interesting option has sharpened. The option has always been there, but because IBM appears to have turned a corner or two, the option is now very real and may offer the best path for its “survival.” But timing, as always, is critical.
While IBM was grinding to get back into the green revenue column, and when its emphasis remained on the right strategic areas, it perhaps unintentionally (or intentionally?) dressed itself up for an acquisition – its own acquisition. Of course, 4% revenue growth may be more than enough to convince beleaguered shareholders that the tide has turned, and IBM will crack $200 a share in no time! Is IBM really back? Yes, some “people-are-saying”it’s back on track. “It’s time to buy the stock now before it’s too late!” You know the pitch. Some are long, and some are short. But for different reasons.
But look at how many problems a sale solves! It solves the leadership problem, it solves the culture problem, it solves the legacy problem, it solves the organic revenue growth problem, and it solves the branding problem. IBM also gets to leave the world’s stage (the one it actually built in the 20th century) in one last blaze of glory (assuming it sells for a respectable premium).
On behalf of some prospective acquirers, let’s simulate some quick due diligence. IBM is moving in the right strategic technology directions, including blockchain, cryptocurrency, artificial intelligence, cloud computing, IOT and analytics. Revenue is increasing. Profitability is adequate. The ship is righted, at least for now.
The post IBM’s Way Out? Sell Itself! appeared first on Statii News.
source http://news.statii.co.uk/ibms-way-out-sell-itself/
No comments:
Post a Comment