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October 23, 2014
MW Commentary

For IBM, A Lesson on Transformation

 

On Monday, markets began this week with a shock to the system: IBM's results were out, and they had a dismal quarter. Revenue and earnings were significantly lower than analysts expected, and CEO Ginni Rometty acknowledged that the company needed another significant transformation.

In an article posted on LinkedIn yesterday, Marty Wolf suggests that IBM, itself long the archetype of corporate transformation, could learn from its business partner and transaction counterpart: Synnex.

When Synnex acquired IBM's Customer Care BPO services business one year ago, it was making a $505 million bet that it, not IBM, was the best owner of the asset. And its bet has paid off-since one week before the acquisition was announced, its shares have risen 30 percent (compared with 12 percent and 7.6 percent respectively for competitors Tech Data and Ingram Micro).

The takeaway? IT Solution providers - as with all IT companies - have strong opportunities to differentiate themselves by adapting to changing market conditions and expanding beyond their traditional roles. And whether they seize these opportunities can have a substantial impact on whether they create value or leave it on the table.

To view the complete article, click here.

Marty previously wrote about IBM's difficulty achieving revenue growth in "IBM: Where's the Growth?". To read more analysis, follow us on LinkedIn.

About martinwolf    

 

                
                Walnut Creek, CA                                                Bangalore, India

With offices in the San Francisco Bay Area and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 125 transactions in sixteen countries and sold seven divisions of Fortune 500 companies. 

 

The firm is also a presenting sponsor of the Global IT M&A Forum.   

 

martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.  

 

To learn more about martinwolf, contact Matthew Putzulu at mputzulu@martinwolf.com.

 

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