IBM software strategy is well suited to market performance

Market analysts said in Wednesday that IBM's strong market performance this week showed that IBM's business strategy of selling technology to help commercial customers liberate themselves from cumbersome software and data was an early success. The company's shares rose 3.3% per cent after IBM reported quarterly earnings and earnings better than market analysts had expected.

IBM's WebSphere software, which accounts for more than 30% of the company's software sales, has had the best performance in IBM's three major businesses, up 8.5% per cent.

IBM has decided to step up efforts to keep the company in the position of the world's largest technology service provider. Because the competition from the market is getting fiercer and the company's main business growth is slowing down gradually.

Frank Gens, chief analyst at the Market Research Institute's International Data company, said it was tough to keep the lead in a highly competitive area in the current growth-less market environment. And IBM's software has done a good job of doing this.

In the third quarter, IBM's revenue rose by 5.1%, to $22.6 billion, 2.5% higher than market analysts had expected. This is the first time since the beginning of 2004 IBM's income than the consensus that the 1% after the "victory".

In a study, analyst Kash Rangan pointed out that IBM's strong performance in the third-quarter software market for its competitors, such as Bea Systems, Oracle and Merrill Lynch & Co. , indicating that the market trend is getting better.

IBM says mergers and acquisitions in the past few years have started to bring a rich fruit to the company, bringing in more than 4 billion dollars in the software market, especially in the software integration marketplace in the fast-growing business-customer information technology sector.

IBM is selling more software that is specifically designed to allow business customers to organize and learn about the overall situation of data that is stored in the company's clutter. In particular, when a commercial company carries out mergers and acquisitions, redundant, incompatible customer data, employee information, and payroll data can make business customers headache.

IBM's effort is called Service-oriented architecture (services-oriented Architecture,soa), which the company says is the next development focus of information technology and the core driving force for future market growth.

IBM wants SOA to help companies sell other products, such as servers and consultancy services, that will help business customers adopt new technologies more smoothly. And more than half of IBM's revenue comes from the technology services market.