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‘Big Blue’ gets bigger

Janet Babin Aug 24, 2006
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‘Big Blue’ gets bigger

Janet Babin Aug 24, 2006
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TEXT OF STORY

SCOTT JAGOW: IBM has been doing a lot of shopping lately for other companies. Already this month, IBM has snatched up three smaller tech firms. Janet Babin looks at why Big Blue is getting bigger.


JANET BABIN: IBM used to be the go-to firm for computer hardware, basic software and supplies. It partnered with other companies to help business customers manage files or protect networks from hacking.

If approved by shareholders, this latest round of acquisitions would give IBM these types of products in-house. That means it’ll have to compete with companies it used to partner with.

John Rymer with Forrester Research says things could get uncomfortable, and IBM’s profits might ultimately suffer.

JOHN RYMER: “Anytime a company changes the competitive balance between it and it’s partners, those partners all look again. They may in fact be spooked and go and put their investments with a competitor of IBM.”

But the acquisitions could be worth it.

Big Blue’s tech management software is one of its most profitable segments. And the inclusion of ISS could help jump start sluggish growth at its services unit.

I’m Janet Babin for Marketplace.

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