International Business Machines (IBM) announced a new six-year IT services agreement through 2015 with Nordea, a leading bank in the Nordic region. The new agreement succeeds a 10-year contract signed in 2003.
Under the new agreement, IBM will provide solutions that will support the overall strategic function of the bank.
The agreement includes IT infrastructure and operations services for Nordea in the Nordic countries. Under the agreement, Nordea will benefit from improved flexibility and transparency and enhanced infrastructure solutions provided by IBM.
IBM will provide mainframes, mid-range servers, PCs, local area network and helpdesk services. The contract also enables utilization of new emerging technologies such as Cloud computing.
IBM also announced an agreement with the Tanzanian government to support the adoption of information technologies and Tanzania’s development in key areas such as education and R&D.
Under the agreement, IBM will facilitate collaboration with U.S. universities on research projects in the area of smarter cities, cloud computing and business analytics.
IBM announced that it will also support the ministry in developing and implementing better access to technology and educational resources for Tanzanian universities and secondary schools, especially in remote areas of the country.
IBM has invested more than $12 billion to build an analytics portfolio which includes organic innovation and acquisitions.
We believe IBM will benefit from new initiatives such as Smarter Planet, Business Analytics and Optimization and Cloud Computing, giving it a push into the next cycle of growth and productivity for its clients. These initiatives will help the company increase its customer base and deliver an improved top line in 2010.
We do believe that IBM is fundamentally a sound company and has a strong market position but our caution is related to our expectations of near-term bumps due to increasing competition in cloud computing, virtualization and enterprise analytics from EMC Corp. (EMC), VMware Inc. (VMW), Hewlett-Packard Company (HPQ) and Teradata Corp. (TDC).
However, we remain optimistic on the company’s long-term growth and expect it to post stronger results in 2010. We advise stockholders to wait for a favorable exit point. Until then we remain Neutral on IBM.
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