IBM Divests Rivermine Operations to Focus on Cloud
IBM Updates Operations, Targets Key Digital Markets
IBM announces sale of Rivermine TEM operations
On May 7, 2015, IBM (IBM) announced the sale of its Rivermine TEM (Telecom Expense Management business) to Tangoe (TNGO). Rivermine provided telecom expense management solutions and was a part of IBM’s Emptoris group, which was acquired in 2011. TEM refers to controlling voice, wireless, and data to reduce risk and costs.
Tangoe provides CLM (Connection Lifecycle Management) software and services that support its clients’ telecom management operations. The company’s CLM platform, Matrix, is an on-demand suite of software and services. According to the company’s slogan, “Matrix enables customers to “turn-on, manage, secure, and comprehensively support all communications connections needed to run your enterprise.”
In 2013, SAP (SAP) collaborated with Tangoe to build its mobile security solution into Tangoe’s admin portal.
According to research firm MarketsandMarkets, TEM is expected to become a $3.43 billion market by 2019. In 2014, it was worth $1.14 billion.
The above graph shows the elements of managed mobility. Research firm Yankee Group believes that companies that integrate all the elements shown in this graph will generate significant value.
The SMAC—social, mobile, analytics, and cloud—revolution, the growing mobile trend, as well as the intense preference of consumers to always be in touch suggest that users increasingly want to be connected to their devices—smartphones, tablets, laptops—through Wi-Fi.
IBM divests operations that aren’t in line with its cloud and “big data” strategy
Along with an increase in the diverse categories of telecom operations, which span from connectivity, bandwidth, to mobile, IBM’s focus has also shifted. Now, the company wants to establish itself as a cloud-based software and services company.
The Rivermine sale was also in line with the company’s divestment strategy. Recently, IBM has divested many of its assets and operations including x-86 servers, semiconductor operations, and customer care because they don’t fall in line with its cloud strategy. For more on this topic, read Why IBM Is Behind Its Peers in the Technology Space.
IBM leads the hybrid cloud space while Amazon (AMZN) continues to be a leader in the overall cloud space. Microsoft (MSFT) and Google (GOOG) (GOOG) are among the top five players in the cloud space.
For diversified exposure to IBM, you can invest in the Sector SPDR Trust SBI Interest (XLK). XLK invests 3.51% of its holdings in IBM.
Browse this series on Market Realist:
