UBS: blockchain is IBM’s ‘best hope for recovery’

UBS - IBM - blockchain

It is well known IBM is betting on blockchain and other emerging technologies (such as AI with Watson) in a big way, in an attempt to position itself at the head of the pack.

But how important are these technological investments to the overall health of the company?

Business Insider is reporting that a research note released on Tuesday by three UBS analyst’s states that blockchain could turn out to be IBM’s ‘best hope for recovery’.

The research followed the news that the New York-based tech giant has seen its stock fall be over 14% year-to-year, despite its many investments in innovative tech.

The UBS note states the banks assumption that blockchain is more than just a buzzword being repeated ad nauseum on Wall Street and in Silicon Valley. In particular, the bank highlights smart contracts as having the potential to transform the $2 trillion payments industry.

It is use cases like this that are the key to IBM’s blockchain success.

The note states:

“Both IBM and Microsoft are looking to monetize blockchain, but we think IBM is ahead and that blockchain is more important for IBM. IBM’s legacy businesses are in decline; we think technologies such as blockchain and cognitive computing are its best hope for recovery.”

IBM has already partnered with a diverse range of businesses, like Walmart, to try and introduce blockchain to track products as they zip through global supply chains.

Importantly, the company has also implemented blockchain as part of its global financing unit, which has around 125,000 clients. USB notes that this move has “reduced dispute resolution time from over 50 to fewer than 10 days and reduced administrative costs”.

The bank concludes that IBM’s history as a leading technology provider to financial firms will position it as a leader of enterprise facing blockchain.

 

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