IBM Launches $1B Diversification Strategy

With an eye toward generating $1 billion (US$) in hardware, software and services revenue over the next three years, IBM announced Tuesday that it has formed new alliances in the Internet banking, retail and insurance sectors.

The pacts were formed as part of a diversification strategy that also brought deals in recent months with Siebel Systems, Inc., Ariba, Inc. and i2 Technologies, Inc.

The new deals include agreements with S1 Corp. and Yojna, Inc. to improve their Internet banking systems, and an alliance with privately-held CommercialWare, a Boston, Massachusetts-based software provider in the online retail market. The largest of the alliances is with UK-based insurance software specialist TiG to create insurance claims management software.

Big Blue Goes Wide

“We want to partner with the application leaders in every industry and market segment and have them leading with IBM technologies,” said Bob Timpson, general manager, IBM Solution Developer Marketing.

“Our competitors are taking a hit,” Timpson continued, “and with over $5 billion already in projected revenues and many more deals in our pipeline, this initiative promises to be an important new revenue and market share engine for the IBM corporation.”

According to Timpson, approximately 50 more partnerships are currently being negotiated, and 20 new alliances could be announced as early as next month.

IBM and Online Banking

Big Blue’s alliance with CommercialWare will expand its presence on the fulfillment side of online retail. CommercialWare’s software is geared toward business applications, including customer service and online order management.

Under the agreement with Yojna, IBM will promote the company’s FinancialNet software to medium-sized banks in the U.S., Puerto Rico, Canada, Latin America and the Caribbean, while Yojna will use IBM’s Netfinity server in place of its Microsoft SQL server.

The alliance with S1 Corp. will give IBM the opportunity to deal with larger banking institutions. S1’s applications are aimed at meeting corporate customers’ banking needs, including cash and asset management on the Internet.

Offsetting Decline

Overall, IBM’s revenues have shown a slow, but steady decline over the past year, a trend that could make the new alliances critical to the company’s future. With the latest alliances and those from recent months, IBM hopes to pull in new sources of revenue for all IBM products.