|More on IBM IBM Finally Going for Smartphones|
ARMONK, N.Y. ( TheStreet) -- IBM ( IBM - Get Report) may not be the first name that springs to mind when smartphones are mentioned, but the tech bellwether is eyeing mobile devices as a major source of software revenue. The hardware giant unveiled a slew of new software and services on Wednesday in an attempt to tap the booming smartphone market. Aimed at service providers and smartphone makers, IBM is looking to further expand its software business, according to Al Zollar, general manager of the company's Tivoli division.
"There's tremendous economic activity that's happening around the mobile device space," he said. "It's not unlike the economic activity that was around the PC in the early days." New offerings unveiled by IBM include analytics software and services for managing cell towers, as well as secure collaboration software for Android-based mobile devices. The tech giant is also introducing software to speed up business processes such as retail sales on mobile devices.
IBM also took the wraps off a research project focused on 4G/LTE, which will test caching and routing technologies in an attempt to boost performance on next-gen networks. "The 4G project is a collaboration -- the client is not named, but it's a major telco," explained Zollar. "The telcos are being bombarded with this rise in data that is stressing their back-end networks." Products such as Apple's ( AAPL - Get Report) iPhone and iPad are certainly increasing the pressure on telco networks, as are changes in consumer behavior. Analyst firm ABI Research, for example, estimates that the amount of money spent on mobile online shopping is tripling annually and is set to reach $119 billion by 2015. IBM, which competes with Oracle ( ORCL), Hewlett-Packard ( HPQ) and Microsoft ( MSFT), is in the throes of a major software push. The Armonk, N.Y.-based firm has vowed to derive 49% of its profit from software by 2015, up from 42% last year. IBM's software business brought in $5 billion during the company's recent first-quarter results, an 11% increase on the same period last year, and almost a quarter of the firm's total revenue.
The company's middleware technology, essentially software that lets different computer programs communicate with each other, was a big driver of this growth. Sales of middleware, such as the company's WebSphere and Tivoli products, rose 13% compared to the same period last year and reached $2.8 billion. IBM has been selling software into the phone space for some time, although the company's new offerings signify an ongoing trend in which enterprise firms are looking to bring in smartphone dollars. Earlier this week, for example, networking giant Cisco ( CSCO - Get Report) announced a new business app for Apple's iPhone and iPad. Shares of IBM closed up 56 cents, or 0.43%, at $130.35 on Wednesday. -- Reported by James Rogers in New York Follow James Rogers on Twitter and become a fan of TheStreet.com on Facebook.