IBM is a multinational computer technology, software, and services company, with approximately 380,000 employees worldwide/ Over 50 percent of IBM’s revenue comes from services, including strategic outsourcing, business-transformation outsourcing, business consulting, systems integration, and application management.
The IBM Software Group (SWG) develops, markets, and sells software, including Information Management (database and content management), Lotus (collaboration tools), Rational (application development), Tivoli (security management), and WebSphere (Web applications). The IBM Systems and Technology Group (STG) manufactures computer servers under the product brands of System x, System i, System p, and System z, and also develops storage products. The IBM Sales and Distribution (S&D) organization is the primary client-facing sales group;
It provides coordination of sales resources for IBM client accounts and sales territories. SWG and STG also include salespeople with expertise in specific product brands.

IBM strategy
IBM had systematized its acquisition process to see immediate gains from its investmentsand though the company has continually improved their strategies and tactics.
1. IBM's key growth market segment
Across the brand structure there are multiple market opportunities. Some areas have faster growth and those tend to be where we to steer both our organic investments and acquisitions. Not predict this to be changing into a specific stratification. Business analytics, process analytics, systems management, device management, security--these are all places that we've been successful in targeting and will continue to do so, but there are many places that are less obvious where could make investments.
IBM traverse our portfolio and the product offerings meet each other at intersections. Customers can see value there and often even ask IBM for more--they want things to be combined and used in context for both today and tomorrow. The intersection is where the customers struggle the most and where we see opportunity to fill the holes.
One important aspect is that the compute architectures we bring to market are all interconnected. IBM need to keep the dialog going and make sure we add all of the other pieces. It's not as if customers have just one piece of the puzzle.
2. IBM means "higher value capabilities" in terms of software
The value of each component is highly dependent on the things that it sits on top of. IBM is not only focus in one area or your competitors can undermine company value from below or above and also navigate around what customers want---often times enterprises look to things that bring value to the line of business.. An application may solve be a profound technical challenge that the user has no interest in, or reason to know about. And it doesn't matter to the user but it does to the guys running the systems. Ultimately, customers will end up with greater or lesser quality of service dependent on how well they have determined the value of their stack and how well the components intersect.
In consideration of IBM's strength in R&D, how are acquisitions determined to be better than something you can build?
IBM can build anything, but we recognize the value of time. We literally can't build everything. Acquisitions can be a great way to augment what we can't do ourselves and we get technology, talent etc.
We generally simplify our decision process into three options: make, buy or partner. Depending on the integration with other components as well our time to market we assess the right approach for a given piece of software or hardware.

IBM and Cloud computing
IBM is a strong advocate of cloud computing. The company has performed a series of analyses to demonstrate the economic advantage of converting from conventional computing platforms to a cloud-computing service. Cloud computing does not require investing in a data processing facility or software to run in that facility. Users pay for computing services as they are consumed. Generally speaking, IBM has found that a "pay-as-you-go" model of computing is an attractive alternative in a difficult economy. Users of cloud computing can conserve capital when funding is the scarcest.
It all comes back to customer value and many of the cloud ideas are about delivering a capability at a lower cost. In some areas, customers won't go to an external provider, but they are interested in the attributes and techniques. Companies like ADP, UPS they all offer online services. They just don't call them cloud. If you are an accountant using ADP, they are your cloud provider. UPS does this for logistics, supply chain etc., they do this all for you on their systems. Is it cloud? Sure, depending on your definition. Odds are most of the consumers of these services don't have a preference.
Users want to buy the outcome--and want to buy it at the best price. That aspect of computing has long been with us but the technology has caught up to make these offerings more broadly available.

IBM i is as a software as a service platform, which has 3 layers The first is an infrastructure as a service (IaaS) layer consisting of servers, networking, storage, and the like, followed by a platform as a service (PaaS) layer consisting of middleware, database, development tooling, plus features Hke Java and Web 2.0 application runtimes. The third layer is the familiar software as a service (SaaS) layer, consisting of applications. IBM i will continue to make strategic investment to bring new cloud infi-astnicture and capabilities to the platform to enhance and make it an even better SaaS hosting environment.
CEO of IBM, Rich Waidmann said “Where it’s different, it’s not like Amazon where you can self-provision with a credit card. It doesn’t work that way. And we’ve yet to find anyone who wants that. If someone is running IBM i, they are running a commercial application for a business. They want better control, they want to know where their data is, how it’s managed, backed up, and all those sorts of details” which indicated IBM i is a great platform for deploying both private clouds and public clouds—and we've already seen the cost advantages of virtualization in deploying private clouds all across our IBM i client base.