IBM Takes Another Small Step

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Earlier this week, fellow Fool Tim Beyers had an enlightening article on IBM's (NYSE: IBM) recent decision to transform some of its expertise in research and development into new offerings from its global services team.

I have written many times about the innovations flowing from Big Blue's R&D labs and think the idea has great merit.

For instance, just Wednesday, Chemistry World reported that IBM researchers had trapped a single molecule between two electrodes. By sending a positive voltage between the electrodes, the researchers changed the molecule enough so that it could either be read as a 1 or a 0 on a data storage device. This nifty little trick, if it can be scaled up, could lead to a new generation of super-small, super-powerful nanoelectronic components.

While there is obviously a huge business in the production of such components, and IBM undoubtedly will pursue it, there is an equally large business in helping businesses and consumers make use of the incredible new capabilities such a device would enable. (To this end, on Thursday, IBM announced that it had taken another step toward becoming an all-purpose "information on demand" service provider by acquiring FileNet (Nasdaq: FILE) for $1.6 billion).

And it's here, in the field of information management, that IBM's global service team can gain on competitors such as Accenture (NYSE: ACN), BearingPoint (NYSE: BE), and InfoSys (Nasdaq: INFY). It can accomplish this by understanding how these capabilities can be exploited to squeeze ever more efficiency out of existing processes.

Furthermore, as the technology is perfected, it will also likely lead to the creation of innovative products. By helping customers understand how to harness the power of these new products, IBM should be able create a win-win situation for itself by driving demand for the products.

It's just another reason why I remain bullish on Big Blue's long-term prospects.

Interested in other Foolishness about Big Blue?

• The Bluest Blue Chip
• Big Boy Blue

Philip Durell has recommended Accenture for Motley Fool Inside Value subscribers. His picks are beating the market. To see how he's doing it, take a free trial and look at the back issues and all of the picks.

Fool contributor Jack Uldrich is the author of two books on nanotechnology, including Investing in Nanotechnology: Think Small, Win Big.He can be reached at jack@nanoveritas.com. He owns stock in IBM. The Fool has a strict disclosure policy.