Coca-Cola European Partners (CCEP) has signed a multiyear hybrid cloud agreement with IBM Corp. to help streamline its existing IT infrastructure, which is aimed at cutting operating costs and driving additional efficiencies.
With the help of IBM (IBM), the world’s largest Coca-Cola bottler based on revenue, wants to accelerate its shift to an open hybrid cloud environment to create a platform for standardised business processes, data and technology. The move is designed to reduce its operational expenses, increase IT resiliency and leverage analytics and artificial intelligence (AI) in its daily operations for enhanced business insights and to improve services to its millions of customers.
As part of the agreement, IBM will help CCEP (CCEP) in its digital transformation by deploying the IBM public cloud and several large workloads. IBM will also provide CCEP with a consolidated view and single point of control over its entire IT infrastructure.
“As businesses shift to cloud, we understand that each industry and client has unique business needs in their cloud adoption journey. IBM is excited to take CCEP on this next chapter of their cloud journey delivering on an industry-specific solution as they migrate mission critical workloads to the cloud,” said Howard Boville, SVP IBM Cloud. “By selecting IBM for its hybrid cloud environment CCEP is embarking on a journey towards an open and secure cloud architecture driving greater digital advancement.”
IBM will help CCEP modernize its IT environment by using Red Hat Enterprise Linux, which is expected to provide an open standard, cost-effective platform. IBM’s Multicloud Management capability will be used to allow private and public clouds to be integrated and managed from a single dashboard.
Shares in IBM, which have climbed 6.6% over the past month, are still down 5.2% year-to-date. (See IBM stock analysis on TipRanks).
Argus Research analyst Jim Kelleher at the end of last month upgraded IBM to Buy from Hold with a $155 price target (22% upside potential), as he believes that the company has “turned a corner”, adding that legacy parts of the business could remain under pressure.
“The company’s hybrid cloud business is accelerating; the overhang of low-return services contracts has largely run off; and the deferred revenue drag from acquiring Red Hat is lessening,” Kelleher wrote in a note to investors. “Margins are benefiting from the software-heavy business mix, enhanced by Red Hat. And demand from the company’s blue chip client base is proving resilient amid the pandemic.”
The rest of the Street has a cautiously optimistic outlook on the stock with a Moderate Buy analyst consensus. The $138.50 average price target indicates 9% upside potential for the coming 12 months.
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