IBM is a multi-national company which makes profit from selling technological solutions to their many customers. First named as the Computing, Tabulating, and Recording Company (C-T-R) in 1800s, it was founded by businessman Herman Hollerith.
Today, the company combines emerging innovations to enable the growth of different industries such as banking, trading, and even healthcare. It has over 400,000 employees and $100 billion in total sales.
The group’s main task is to provide information services, cloud services, Global Technological Services for various enterprises around the world.
How the Company Makes Money
IBM earns its revenue by selling and producing various information technology (I.T.) products and services to improve the growth and sales of many businesses and clients around the world. According to Investopedia.com, it has 5 business segments: Cloud & Cognitive Software, Global Business Services, Global Technological Services, Systems, and Global Financing.
Cloud and Cognitive Software
Cloud and Cognitive Software makes up 26.72% of IBM’s total revenue. This refers to the different applications that can help IBM’s clients improve their business through support in various cloud and mobile communications. The segment also includes various operating systems that can process big data and other analytics for a business. Famous software that IBM offers are Watson, WebSphere, Tivoli, Rational, and Social Workforce.
Global Business Services
Global Business Services makes up for 22% of the company’s profits. Its primary goal is to help provide customized solutions for a business or enterprise. The segment is divided into two parts: Consulting and Application Management services. Consultation GBS refers to professional advice in terms of strategies, technologies, finances, production methods, and system operations. On the other hand, Application Management Services consists of different support, maintenance, management, and back-end aids that can complement the various operating systems, software, and applications that they offer.
Global Technological Services
GTS, also called Global Technological Services, ranks 2nd place in IBM’s most profitable segments. It took up 41% of their revenue in the year 2015. This segment refers to their offerings in various information technology (IT) infrastructures as well as business systems. The main goal of GTS is to use the company’s experience in terms of computing business objectives to help enterprises improve their sales. They do this through aligning a client’s interests with a business’ IT capabilities. Major Global Technological Services that the company offers are outsourcing, cloud services, integrated services, tech support, and global systems support.
Without the appropriate hardware, IBM’s software, operating systems, and applications won’t work properly. This business segment makes up for almost 8% of the company’s profit. They are made to support the great technological demands coming from new cloud-based systems, as well as artificial intelligence analytical processes. IBM systems include data centers, storage products, servers, semiconductors, packaging products, and even microelectronics. Some famous items from this segment include power systems, disk storage, flash storage, x-series and z-series.
Global Finances takes up 3% of IBM’s total profits. It is a segment that tackles acquisition of different technological services through expert financing and asset management methods. Through this segment, different enterprises are given a chance to grow with the help of IBM’s products. It is split into three main parts: client financing, commercial financing, and remarketing. Client financing refers to leases and loans that can help clients gain IBM’s Global Technological Services. Commercial financing discusses receivable funds for short term inventories and accounts. Remarketing is defined by reselling used equipment at the end of lease transactions to new clients.
IBM’s Main Competitors
As a world-class information technology service provider, IBM has many competitors. Various companies are consistently competing for the top spot in the industry, and there are some main competitors that are difficult to shake-off. Here are the top contenders for IBM that offer the same types of products and services in information technology.
Tata Consultancy Services
TCS, or Tata Consultancy Services, is one of IBM’s main contender in the industry. Founded in 1968 by Tata Sons, the company currently stands as the largest Indian multinational IT services and consulting company. It operates in over 150 locations in 46 countries and was ranked by Forbes as the 64th World’s Most Innovative company in 2015. As of 2019, Tata Consultancy Services has earned over $20.9 billion in revenue, making it an international technological powerhouse.
TCS provides different IT based products which include app development, outsourcing, business planning, consulting, enterprise customization, payment systems, and even educational services. It supports different BPO, insurance, banking, and computing businesses across the world.
As the company continues to expand on its innovations, it recently acquired blockchain-based technologies. They have also been branded the Fastest Growing IT Service of the decade by Brand Finance. As TCS continues to grow in strength and influence, they will surely remain as one of IBM’s long-term competitors.
Accenture is an Ireland-based multinational information technology company which was founded in 1989. It provides products and services relating to business strategy, consulting, digital integration, and operation improvement. Accenture’s revenue total up to $43 billion in the year 2019, and they have half a million employees situated in 120 countries. The company takes pride in serving 90% of Fortune Global 100 companies, and they have acquired popularity in all corners of the world.
Today, Accenture focuses on providing computer solutions to banking, energy, telecommunications, healthcare, and public affair industries. They have garnered many awards throughout the years including consistent entry into Fortune Global 500, Best Management Consulting firm of 2017, World’s Most Admired Information Services Company, and Best Overall Healthcare Management Consulting Firm.
Accenture’s strong credentials as an award-winning and internationally loved company makes it a strong contender against IBM. As they acquire more partners, it is certain that Accenture will continue to grow in profit, product, and people. They continue to show dominance in the field of IT consultancy, and they will only improve as time passes by.
Hewlett Packard Enterprise
Hewlett Packard Enterprise is a world-renowned information technology company which makes profit out of selling cloud-based systems, IT services and products, and business software and hardware. It came from the Hewlett-Packard company, offering aid to various enterprises through improvements in cloud computing, data storage, and even artificial intelligence. The company was founded recently in 2015, but it has already made big leaps in becoming a top contender in the industry.
As of 2018, Hewlett Packard Enterprises was reported to have $30.85 billion in revenue. It also ranked 107 in the year’s Fortune 500 list. Their operating segments consist of Intelligent Edge, Hybrid IT, and Financial Services. With Aruba Networks as its subsidiary, HPE continues to show great improvements in the IT industry. It has also partnered with many cloud services, cloud consulting, supercomputing and network security companies such as SGI, Nimble Storage, Cray, and Cape Networks.
With only 4 years in the field, HPE is bound to exceed expectations. They continue to discover innovations through their Hewlett Packard Labs, and will move forward as a top contender in the IT Market. Truly, HPE has lots of potential to be a leading IT company in the future.
Oracle is a California-based information technology service and product provider which aims to bring innovative solutions to its clients. Founded by Larry Ellison, Bob Miner, and Ed Oates in 1977, the company offers database products, enterprise software, and cloud-integrated systems that can help improve the growth of a business. In the year 2019, Oracle had a total revenue of $ 39.5 billion and 136,000 employees across the world.
One of the company’s main focus is providing Oracle-engineered databases such as Berkeley, Oracle Rdb, TImesTen, MySQL, and NoSQL. They are also responsible for the development of many business applications such as Oracle SEM, Fusion, Siebl, and PeopleSoft. In terms of Enterprise Management, the company also offers Oracle Enterprise Manager (OEM) that can help in providing web-based surveillance and management systems for global business units. They also have complementary hardware such as the Exadata for storage, Big Data Appliance for big data analysis, and Exalytics for analytics.
Overall, Oracle provides a one-stop shop for every IT enterprise need. They are capable of giving clients protected and efficient systems that can help increase productivity and growth. Oracle is one of the most complete service and product providers in the market, and they have solutions for any underlying problem. This makes them a great competitor that can rival IBM.
Cognizant is a New Jersey-based company founded by Kumar Mahadeva in 1994. They help in digitizing organizations to improve their sales, relevance, and customer connectivity. The company provides products and services related to artificial intelligence, cloud enablement, system automation, and digital engineering. As of 2019, Cognizant has reached revenues of $16.8 billion. They operate at 166 different locations with 292,500 employees.
Cognizant operates in two units; vertical and horizontal. Their vertical unit focuses on industries such as banking, medical care, insurance, production, and retail. On the other hand, their horizontal unit consists of technological areas such as analytics, mobile development, and BPOs. Cognizant mainly works as an offshore technological outsourcer of different giants in the American Industry.
As more and more companies rely on Cognizant for improvement, they will continue to be a threat for IBM. Due to its standing as a very adaptable and customizable service provider that can cater local and international enterprises, they will surely remain as a top contender in the IT industry.
Wipro is an India-based company with headquarters in Bangalore. Similar to IBM, the group provides information technology solutions as well as consultations and system automations for businesses. Founded by Sudipto Halder in 1945, it was first named Western India Palm Refined Oil Limited, which was then abbreviated as Wipro. Today, Wipro has a total revenue of $8.5 billion and it has 172,000 employees in 50 countries.
In terms of sustainability, Wipro packs a punch. In 2010, the company ranked 1st in the Asian Sustainability Rating. It is known for creating cleaner and greener tech solutions for its clients and customers. Wipro’s main product offerings are analytics, AI integration, application development, big data processing, cybersecurity enhancement, and even blockchain.
As a very eco-friendly enterprise, Wipro is becoming a force to be reckoned with in the IT industry. More and more clients are seeking sustainability, and it is very clear that this company can provide them with what they need. As time passes by, Wipro will surely stand strong as a top contender against other tech giants.
Capgemini is a French corporation which provides business consultancy, technological outsourcing, and maintenance services. Founded by Serge Kampf in 1967, it first emerged as Sogeti: a business operation management company. Through various acquisitions of other companies such as Gemini and CAP, it quickly became a known IT provider in the market as it was the first to develop the Test Management methodology.
Today, Capgemini has over $14.12 billion in total revenue. It has 220,000 employees in over 40 countries, of which half are in India. Capgemini's goal is to bring business growth and improvement through cloud computing, digitization, and automation. It is known for creating close connections with customers through providing them specific solutions for all of their needs.
Capgemini is slowly closing the gap towards IBM. It ranked just one place ahead of IBM in Everest 2018, and the company continues to grow at a very fast rate. As they continue to build lasting relationships with more clients, Capgemini is bound to be a bigger name in the future.
Infosys is an India-based IT company which focuses on providing innovative enterprise consultancy, outsourcing services, and back-end support to its clients. It was created in 1981 by seven engineers in Maharashtra, only beginning with a $250 capital. Today, the company stands strong with over $12.4 billion in revenue and 250,000 employees worldwide. What started as a humble beginning rose in popularity and became an Indian tech giant.
Infosys' main offering is their Live Enterprise. It is a program that seeks to reinvent and empower businesses through 5 areas: Insight, Experience, Assure, Accelerate, and Innovate. Through these areas of improvement, a given enterprise will have increased learning, proximity, agility, automation, and design interfaces.
Infosys does well with an enterprise-focused approach to digitization. They provide very specific solutions to a business model, and they improve operations drastically. In the future, more enterprises will seek Infosys’ help, and they will appreciate the growth that this company will have on their systems.
NTT Data is a Japan-based IT company which provides services and consulting for its clients. It is mainly focused on serving governments, banks, and telecoms, but it is quickly gaining popularity in the healthcare industry. The company is a subsidiary of Nippon Telegraph and Telephone and it has almost $15 billion total revenue with 120,000 employees across the world.
NTT Data offers IoT integration, Big Data processing, and AI digitization for its clients. It also works as a tech outsourcing service which can provide state of the art systems for many enterprises. Furthermore, the company is able to address key business issues through comprehensive and specific IT solutions. NTT Data ranks 5th in Forbes global 2000.
As NTT Data continues to span out towards the global landscape, it will remain as one of IBM’s top contender. Today, it is the leading IT service provider in Japan, but it has the potential to be a leading service provider in the world.
HCL or HCL Technologies without a doubt is one of the biggest IT services companies in the world. It provides global solutions and business consultancy for its clients through technological advancements. It was founded by Shiv Nadar in 1976, and now has $10 billion in revenue and almost 150,000 employees worldwide. They are partners with Celiriti, Dell, BITA, and even IBM in some ventures.
Research and development is one of HCL's greatest strengths. The company is capable of branching out in many fields and industries, and the possibilities with them are endless. Currently, they have succeeded in entering sectors in aerospace, defense, insurance, healthcare, mining, entertainment, communications, and even logistics. Among their main business segments are Systems Integrations, BPOs, IoTs, Cybersecurity, and analytics.
In the IT market, HCL offers one of the most diverse services. Because of this, they have the potential to dominate on a global scale, thanks to their adaptable extensions to other fields. HCL is ever-growing and ever-expanding. As they continue to gain more partners and support in the industry, they will remain as a fierce competitor against their current partner IBM.
SAP SE, or Systems, Applications, & Products in Data Processing, is a Europe-based international corporation that seeks to provide businesses growth through software. It was founded in Weinheim, Germany 48 years ago, and currently has a whopping 27.553 billion Euros in total revenue. The company has regional offices in 180 countries, serving over 425,000 clients. As of 2016, it is the world’s third largest programming company.
SAP focuses on the improvement of six sectors: processes, discrete, consumers, finances, services, and public affairs. They have available software and products for enterprises of any size, be it small, medium, or large. Their PartnerEdge program enables increased revenues for business partners through the use of their SAP software such as mySAP CRM, mySAP ERP, and mYSAP SRM.
SAP has acquired over 70 companies in the course of their operations. Because of this, their ventures continue to expand to other industries such as robotics, 3d visualization, and mobile development. They also have cloud platforms to help monitor businesses efficiently, as well as third-party integrations for better customization. SAP brings a lot to the IT industry, and because of this, they continue to be a top contender against IBM.
In terms of business document technology, Xerox poses a serious threat to IBM. The company is popular worldwide for its copiers and scanners; however, it is also currently considered a leading team in terms of desktop GUI and personal computing. Xerox has an overall revenue of $10 billion and 27000 employees across the world.
When it comes to what they do, few come close to Xerox’ performance. Their brand is well-established and developed, and it is hard to compete against them. They offer various products for scanning, printing, copying and fax, and they are very profitable when properly integrated into businesses. Famous products of the company are IGen, Impika, Trivor, and Rialto.
Xerox has been embedded in today’s society to the point where it became a synonymous word for photocopy. Because of this, many people are accustomed to the team, and they are well-known in every part of the world. As time progresses, Xerox will continue to be a great asset to any enterprise. This makes them a force to be reckoned with in the IT industry.
Salesforce is a US-based company which focuses on business improvements through system automation, digitization, Big Data processing, data analytics, and app creation. It is a very employee friendly company, and was ranked as part of the Top 100 companies to Work For in 2020 by Fortune. Today, Salesforce has a total revenue of $17.1 billion, and over 50,000 employees across the world.
Salesforce mainly uses cloud-computing as a medium. They make use of CRMs or Customer Relationship Management systems to connect consumers to a business. This fosters the growth of an enterprise in terms of profit, revenue, and connectivity. Salesforce is capable of serving small, medium, and large enterprises. They have shown promising advancements in various sectors such as banking, manufacturing, energy, health care, media, government, and transportation. The company’s diverse usability makes it a great contender against IBM.
The information technology industry may be a large sea of many rivals and contenders, but IBM continues to be a leading company. The advancements that IBM has created for computing and processing are notable, and without the company, others will not be in this field. The top contenders for IBM in 2020 are TCS, Accenture, HPE, Oracle, Wipro, Cognizant, Capgemini, Infosys, NTT Data, HCL, SAP, Xerox and Salesforce. In the future, it's hard to determine which of these companies will rise to the top. However, it is a sure thing that IBM will always strive hard for the title of Best IT service provider.