IBM’s Blockchain Announcement and What the Future Holds
It’s no surprise that we are hearing more and more about Blockchain in the news today, but if you’re asking yourself what it is, to keep it simple, Blockchain is a shared digital ledger for recording the history of transactions which cannot be altered in any way, shape or form.
Why do we need this you may ask? Well, if you think about it, transactions take place every second – orders, payments, account tracking and so forth. These transactional applications need to establish a way to ensure trust, accountability and transparency.
Now on that topic, let’s dive into the news about tech giant IBM, and what they revealed early last week. In an investor briefing, they announced that 400 Blockchain Projects with 63 Future-Minded Companies have embraced the company’s Blockchain platform.
It comes as no surprise that IBM has released this announcement, at least for us. In a written article, my colleague Venus shared this comment from, CFO and senior vice-president James Kavanaugh earlier this year: "2018 will be all about reinforcing IBM's leadership position in key high-value segments of the IT industry, including cloud, AI, security, and blockchain."
It’s said that out of the 63 companies, 25 of them are involved in global trade plays, another 14 firms work in the food logistics industry and the last 14 companies are working on blockchain projects in the global payments sector.
To that extent, it seems IBM doesn’t want to be behind anyone in the race to adopt blockchain technology. The Armok-based tech giant now has heavyweight blockchain clients like Visa, HSBC, and Walmart.
“Blockchain is an interesting technology that every enterprise is going to use down the road.” Stated Arvind Krishna, Director of IBM Research.
IBM’s blockchain business solutions are built on top of their native open-source blockchain platform Hyperledger. The IBM website states: “IBM provides blockchain solutions and services leveraging Hyperledger technologies, including Hyperledger Fabric and Hyperledger Composer.”
The Hyperledger Fabric uses “permissioned networks” which mean that some information on the network can be sealed with a password to ensure better security.
It’s also said that this new platform is a cheaper alternative to its current enterprise plan for firms looking to develop blockchain applications which help startups and developers build their own distributed ledger projects. In an exclusive interview with CNBC, Marie Wieck, General Manager of IBM Blockchain commented on the recent news: "The new plan is perfect for pilot projects and early stage development work for those who want to build solutions on the IBM blockchain platform which currently has over 250 active blockchain networks, Our expertise in building and scaling networks is invaluable and will be shared across a wide ecosystem."
IBM to Report Earnings for Q1 2018
For Q4 of 2017, IBM’s revenue of $22.5 billion grew 3.5% year over year. In addition to their long-awaited revenue gains, the company's operating income also grew 3% year over year, generating earnings per share of $5.18.
For Q1 of 2018, the company plans to report at least $13.80 in operating earnings per share which is exactly what it produced in 2017. The company believes it will generate between 17% and 18% of that in the first quarter -- or between $2.34 and $2.48. The company put this statement out in regards to their revenue, saying only this: "we're entering 2018 with a stronger revenue profile than a year ago." For reference, the company reported $18.2 billion in revenue for the first quarter of last year. IBM also expects margins to stabilize and is forecasting free cash flow of about $12 billion for the year.
It’s said that Analysts' consensus are estimating revenue of $18.71 billion for Q1, up 3.1% year over year, as well as adjusted earnings per share of $2.39, near the midpoint of IBM's guidance, and up slightly over the prior year's quarter.
Last year, the company produced just over 24% of its full-year revenue during the second quarter. Assuming similar revenue to last year, we should expect the company to forecast sales that exceed $19.3 billion for the second quarter of 2018.
IBM Named a Leader in Gartner’s MQ for DXP Platforms 2018
You might remember when we covered Gartner’s MQ for Digital Experience Platforms earlier this year, and IBM was named as one of the “Leaders” in the report.
To summarize the report: “Gartner’s analysts evaluated the vendor’s DXP functionality based on IBM Customer Experience Suite and IBM Employee Experience Suite. As a result, the Stamford, Conn.-based research firm concluded that only a “few DXP vendors can match IBM's list of capabilities, features, and functions” as its products cater to complex digital enterprise needs. That being said, Gartner believes that the vendor has been facing a “legacy” reputation issue when it comes to its digital experience offerings.”
Having said that, Stephen Mello, Vice President, Strategy & Offering Management, IBM eCommerce and Merchandising Segment commented in a blog post on what Gartner had to say for choosing IBM to lead the pack this time around and what features really made them stand out:
- Market Understanding: Gartner praises IBM for vision and market understanding. They credit our “logical product packages and a keen eye towards technological innovation.”
- Artificial Intelligence (AI): The report recognizes IBM as “an early and aggressive adopter of AI to improve user engagement and the user experience.” We agree – over the past year, we’ve integrated Watson AI into our digital experience portfolio – for example, see our new Watson Content Hub solution, featuring the time-saving AI-assisted asset tagging.
- Functional Breadth: IBM is a powerhouse brand whose name conveys inherent trust among prospects and customers alike. Gartner references our credibility with our “long and continuing history supporting large enterprises with complex digital experience needs.” With a long list of notable customers like the US Open, Blue Shield of California and Soccer.com, it’s no surprise that IBM excels in supporting needs of varying size and complexity.
If you haven’t yet, you can also download the report here.
Will IBM be able to continue this ongoing trend? Not only will it be interesting to see what IBM’s earnings will be for the first quarter, but also if they will be able to keep this ongoing trend for the second quarter.
It’s said that this year, IBM has been hitting the news with Blockchain but last year their Q4 quarterly sales were up $11.1 billion from analytics, cloud computing, artificial intelligence (AI), security and mobile activities. That’s a 17% increase over the prior-year.
We will be sure to keep you posted on any other IBM news so make sure you check back regularly for any updates!
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