IBM Corp. (IBM) and High Energy Accelerator Research Organization of Japan, also known as KEK, have joined hands to develop a server and storage solution named “KEK Central Computer System.”
The KEK Central Computer System will consist of more than 370 highly-scalable IBM iDataPlex systems that are capable of high-speed processing while consuming less power and space. The system will store and analyze data generated from experiments that will be used for better understanding and exploration of the universe. The project is expected to start on February 12, 2012.
KEK expects its experimental data to increase exponentially in excess of 10 petabytes (1 petabyte=1000 terabytes / one million Gigabytes) and IBM will develop a storage system to counter, store and manage the data with its IBM General Parallel File System (GPFS).
To enable the organization (KEK) to monitor its energy consumption limits, IBM will also provide a framework with its IBM Systems Director system management software and IBM Active Energy Manager.
Additionally, the new IBM system and storage solution will be used by domestic and international research institutions to share resources and data in the near future.
Recommendation
We believe that IBM will continue to benefit from its spate of new initiatives like smarter planet, business analytics and optimization, and cloud computing over the long term. It has already supported innumerable organizations with its industry-ready software and hardware solutions.
IBM remains a heavyweight in the cloud computing market and its strong cash balance enables IBM to acquire companies with high intellectual property (IP), which will drive further growth in the upcoming quarters.
We have a long-term Neutral recommendation on IBM and are optimistic about its strong fundamentals and robust growth prospects going forward. The shares also appear to be fairly valued
However, IBM continues to face stiff competition from a number of companies, including Hewlett Packard Co. (HPQ), Microsoft Corp. (MSFT), Oracle Corp. (ORCL) and EMC Corp. (EMC).
Currently, IBM has a Zacks #3 Rank, which implies a short-term Hold rating.
