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Cloud Computing

IBM Buys Xtify in Mobile Commerce Play

IBM Buys Xtify in Mobile Commerce Play
October 9, 2013 1:00PM

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The acquisition looks like an excellent deal for both companies. IBM will expand its mobile infrastructure offerings. And joining an organization of IBM’s size and influence should help ensure that Xtify's technologies reach a far wider customer audience than if the company had continued going it alone, said analyst Charles King.

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Big Blue is pushing deeper into the cloud-based mobile messaging space. IBM has acquired Xtify, a mobile messaging tools provider that helps enterprises improve mobile sales, drive in-store traffic and engage customers with personalized offers. Financial terms were disclosed.

Xtify lets digital marketers create content-rich, in-app mobile messaging and push notifications to spur mobile application usage. Mobile applications can increase in-store traffic and improve mobile sales while fostering brand loyalty.

"With the increase of mobile devices, organizations across all industries are anxious to develop a mobile approach to engage their customers," said Kevin Bishop, IBM vice president for digital marketing. "The acquisition of Xtify provides new ways for our clients to foster a direct, one-to-one communication channel with their customers."

The Mobile Opportunity

As IBM sees it, mobile communication channels are completely transforming the way that organizations interact with their customers. Consumers expect personalized messages and promotional offers based on expressed interests and shopping and browsing habits.

With the Xtify acquisition, IBM aims to give marketers a new opportunity for client engagement anytime, anywhere, as consumers traverse across multiple digital channels, browsing in stores, shopping on mobile Web sites or other online channels.

IBM did its homework and offered research from Gartner to further prove out its reasoning for the acquisition. The market research firm predicts that worldwide mobile payment transaction values will reach $235.4 billion in 2013, a 44 percent increase from 2012. These increases will continue at a 35 percent annual growth rate culminating in a $721 billion market with 450 million users by 2017.

What’s more, a new IBM Institute for Business Value study confirms that leading organizations have seen clear benefits in their mobile investments to date: 73 percent have experienced measurable results from their mobile initiatives versus 34 percent of all other companies in the study. Further, 81 percent stated that mobile capabilities are fundamentally changing the way their organizations do business.

An Excellent Deal

IBM said the buy would help extend its mobile capabilities to digital marketers across all industries ranging from retail to citizen engagement in the public sector through cloud-based services. Specifically, IBM will integrate the tech into its Smarter Commerce initiative, providing campaign creation, personalized content, dynamic real-time segmentation and analytics for all mobile devices and browsers.

One feature of Xtify’s cloud-based campaign management platform that IBM called out was notifications to mobile consumers when new content and promotions are available. The idea is to help businesses deepen connections with their customers.

We caught up with Charles King, principal analyst at Pund-IT, to get his thoughts on the acquisition. He told us the acquisition looks like an excellent deal for both companies.

“IBM is certainly expanding its roster of mobile infrastructure offerings and Xtify should help bolster solutions and services related to mobile advertising, marketing and payments,” he said. “Along with the monetary benefits Xtify will realize from the deal, joining an organization of IBM’s size and influence should help ensure that the company’s technologies reach a far wider customer audience than they would have if the company had continued going it alone.”

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