The problem, of course, is how to get the growth back on track. It won't be simple. IBM is getting away from the lower-end hardware biz, which it somehow not only lost to upstarts like Dell
Today's answer? More acquisitions. The firm recently agreed to buy a data-integration partner, Ascential Software
Unlike the Miss Haversham of software, Microsoft
Will this help IBM get more traction with smaller businesses? How much could it contribute to the top line? No idea. The bragging-rights section of Gluecode's website isn't exactly bristling with heavy-hitting clients, but if the $100 million price tag being reported today is true, it won't be much of a hardship for IBM if things fall through -- it probably spends that much on lunchroom Jell-O in a given year.
Investors should take this away: IBM continues to make strategic moves toward future growth, and it has good balance sheets and more than enough free cash flow ($11 billion last year) to do what it takes. I may not have liked it near $100 a share, but at $73 and change, trading at multi-year lows in terms of price-to-earnings, enterprise value-to-sales, and enterprise value-to-EBITDA and free cash flow, value investors should be giving Big Blue a good, hard look.
For related Foolishness:
- Is IBM a nano-player?
- Why is IBM so blue?
- In December, I urged Fools to forget IBM. What about now?
- Stop listening to the simpletons who write headlines. IBM's no bellwether.