Response to WSJ Article: http://blogs.wsj.com/digits/2013/09/16/ibm-again-pledges-1-billion-to-a-linux-effort/
IBM has invested another $1 Billion in the operating system known as Linux. This announcement comes after IBM’s $2 Billion acquisition of softlayer technologies, a big player in the data and cloud computing industries. IBM believes that cloud computing is the future. By 2015 it believes that cloud revenue will bring in $7 Billion of revenues. It seems like there is a race for cloud computing recently. As companies continue to collect more and more data they need places to store all of it. Cloud computing could be the solution. At my job now my whole department has been converted over to “the cloud.” Companies no longer have to pay for the electricity to run the old fashioned computers, not to mention their storage constraints. Now, these little terminals can almost fit into the pockets of one of my cargo pants. Plus, you are able to login to all of your work files from home, still being able to run all of the same programs even if they are not installed on your home computer. Linux is also the main operating system for google and the Android system. So, when you look at IBM’s investment in Linux it isn’t just an investment in a company, it is an investment in the future. Many argue that google is the next apple, it’s innovation with google docs and other technologies are raising the bar. A google account is can get you a login at an enormous amount of websites. IBM clearly is not ready to miss the boat on this. IBM has shown over the years that although it has made mistakes, it wants to advance and stay relevant. IBM is a flexible company, they no longer make computers yet they are still growing in other more profitable arenas. On a side note, IBM has gained attention sending retirees and current employees to health exchanges. At a P/E of 13.53 and nearly $25 off its 52 week high, this might not be the worst time to buy IBM if one was interested.
