IBM Leads IT Space

According to the latest data from IDC Corp. (IDC), IBM Corp. (IBM) is ranked number one in IT consulting. This is the second consecutive year that IBM has been ranked number one, which indicates market share gains.

IBM’s IT outsourcing services help clients improve IT efficiency and facilitate the rapid deployment of new IT services for future business growth. Recently, the company announced a strategic IT outsourcing agreement with S-OIL Corporation (S-OIL), the third largest oil company in South Korea. The agreement spans a period of seven years but further details regarding consideration were not provided by management. A service fee will be imposed based on the services provided by IBM.

Under the agreement, IBM will provide broad outsourcing services, including application operation and management, storage, user support services, server, network operation services and disaster recovery services to S-OIL. These services will support S-OIL’s business growth plan while helping to grow savings by reducing cash outflow in IT infrastructure and in-house maintenance services.

IBM will set up a Value Creation Center (VCC) for S-OIL, which will focus on delivering competitive advantage to S-OIL in the energy industry. IBM’s strategy remains focused on the high-growth, high-value segments of the IT industry. The outsourcing services provided by IBM will help S-OIL respond more effectively to the changing global business environment.

We expect these new services to help IBM grow revenue in future quarters. By providing enhanced customer services, we believe IBM will retain its strong position in the services markets, which should continue to drive growth.

Although IBM is a proven provider of IT infrastructure and has been better insulated from the recent weakness in the U.S. economy compared to many of its peers, the IT services business is becoming increasingly competitive. In particular, IBM is facing competition from Hewlett-Packard (HPQ) and Dell (DELL).

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