IBM's Billion-Dollar Bet on Flash: Who Loses?

IBM (NYSE: IBM  ) is pouring $1 billion in research and development funds to create flash storage technology to embed in servers and storage appliances.

For the uninitiated, flash is a more efficient and reliable format for storing information, which is important when you're tackling huge volumes that need to be processed quickly -- an IBM specialty for years now. Call it another Big Blue Big Data power play.

IBM has long been attractive for its dividend and consistent cash flows. This news doesn't change that, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following interview with The Motley Fool's Erin Miller.

Rather, incumbent suppliers of flash technology -- notably SanDisk (NASDAQ: SNDK  ) and Fusion-io (NYSE: FIO  ) -- both fell noticeably in the days following the announcement. Each wants to play a role in making flash a central technology for handling Big Data, Tim says. IBM might get in the way of that.

Does this news make you more bullish on Big Blue's prospects? What about its competitors? Please watch this short video to get Tim's full take, and then leave a comment to let us know whether you'd buy, sell, or short IBM stock now, and why.

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  • Report this Comment On April 22, 2013, at 12:11 PM, camarodan64 wrote:

    in a speculative view based on nothing IBM may want to acquire both fusionio and sandisk to cement dominance in the space.

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