IBM: Big Data, Analytics to Drive $20B in Revenue by 2015

IBM upped its 2015 revenue target for big data analytics from $16 billion to $20 billion.

At its annual investor briefing, IBM chairman, president and CEO Ginni Rometty announced IBM is increasing its previously stated 2015 revenue target for analytics and big data from $16 billion to $20 billion.

Business analytics is one of IBM's strategic growth initiatives -- along with cloud computing, Smarter Planet and emerging Growth Markets -- that are key drivers of growth and profit within IBM's 2015 operating earnings per share (EPS) roadmap objective of at least $20.

At the investor briefing, which was held February 28 in San Jose, Calif., Rometty outlined three strategic directions for IBM. One is IBM's model of continuous transformation as the company continues to remix to higher value, high-margin businesses, acquiring new capabilities through acquisitions, divesting of non-strategic assets and focusing R&D on growth initiatives like big data and analytics. This makes markets through new categories, geographies and clients; reinvents its core businesses and skill levels; and continues to generate the strong cash flow to fund the transformation, IBM said.

The second strategic direction is IBM is embarking on a new era of computing --- Smarter Computing --- driven by the rise of Big Data and analytics, mobile, social and cloud technologies; built on software-defined environments and based on open platforms.

And as its third area of strategic focus, IBM is making new markets and engaging with new front-office clients --- such as Chief Marketing Officers (CMOs), Chief Procurement Officers, heads of Human Resources, and city leaders --- that IBM is serving.

The investor briefing took place at IBM’s Almaden Research Center and Big Blue opened up the lab to investors to showcase some of its prized research projects that are likely to soon result in products or further scientific breakthroughs.

On the continuous transformation front, since 2010 IBM announced or closed 35 acquisitions for around $12 billion and divested of non-strategic assets. Indeed, over the past decade IBM divested almost $15 billion of revenue, divesting its PC group, its printing systems division and retail store point-of-sale business, among others -- businesses that no longer fit IBM’s strategy. If IBM had not done these divestments it would be a larger company today, but with lower margins and capabilities less essential to its clients.

Moreover, IBM has had a long history of remixing research and development. Today 60 percent of IBM researchers are in fields that support its key growth initiatives, such as 400 mathematicians developing algorithms for business analytics.

Meanwhile, Smarter Planet is spawning Smarter Commerce, Smarter Cities and Social Business focuses. IBM opened 144 new branches in growth markets in 2012, for a total of 285, where the company sees continued profitable growth through solutions such as Smarter Transportation and Smarter Finance. And over the last three years IBM has increased its skills base in analytics by 8,100, while the company also added nearly 9,500 sellers with expertise in sectors such as healthcare, energy, telecom and banking, plus metals and mining and assigned 5,000 consultants to its new Globally Integrated Enterprise practice in GBS.