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IBM to Bang Software Drum for Investors

NEW YORK (TheStreet) -- IBM (IBM) hosts its investor briefing Thursday with the tech giant expected to reiterate its long-term goals, as well as its ambitious efforts to drive software growth.

"We anticipate management to reiterate its 2015 roadmap of at least $20 in EPS and key strategic initiatives including the shift toward higher value and growth areas," wrote Shaw Wu, an analyst at Sterne Agee, in a note released earlier this week. "With HP (HPQ), Dell (DELL) and other competitors in transition, we believe IBM is well-positioned to capitalize."

The tech bellwether reported robust fourth-quarter results last month, lifted by strength in its software business. Software, which accounted for more than a quarter of the firm's total revenue, increased 3% year over year (or 4% adjusted for currency) to $7.9 billion.

Set against this backdrop, IBM expects to generate $16 billion in analytics revenue by 2015, a target which could be repeated during the shareholder meeting.

"We anticipate the company to reiterate its key strategies that have proven successful, namely the continued shift toward higher-value areas including software (27% of revenue) and services (51%) and growth initiatives including smarter planet, cloud, and business analytics," wrote Wu.

Smarter Planet, IBM's initiative to sell software and services by driving efficiency in areas such as industry, energy, transportation and government, celebrated its fifth birthday this week. Big Blue also announced this week that Miami-Dade County in Florida is using its research, hardware, software and services to improve operations across 35 municipalities and the city of Miami.

The company's also eyeing new revenue streams from high-end computing. IBM, for example, unveiled the first commercial technologies based on its Watson supercomputer earlier this month, targeting the lucrative health care sector.

Sterne Agee's Wu predicted that hardware will be on the agenda at IBM's investor briefing. "We anticipate the company to provide more color on its recent hardware refreshes, including its Power 7+ and System z high-end servers and PureSystems," he wrote. "We see this driving a multi-year product cycle similar to previous ones where new server sales have helped drive associated software and services."

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