IBM Buys Three Companies In a Week, Now Has 10,000 Employees Working on Digital Advertising

IBM's attempt to transform itself into a digital ad agency probably makes somewhat more sense than GE's foray into entertainment when it acquired NBC. At least IBM was already in the digital business and ad-driven search is a profitable business model.

But there is something kinda bizarre and desperate about a computer hardware sales behemoth trying to become a free-flowing creative tech innovator. It's not that it doesn't make strategic sense, but it's whether a company that prides itself on being a straitlaced corporate monolith can really put its heart into this and successfully manage the transformation. JL

Julie Bort reports in Business Insider:

IBM is under a lot of pressure these days to turn itself around as its huge, cash-cow hardware business has been shrinking. (The acquired) companies are joining the IBM iX unit, which now employs a whopping 10,000 people. IBM claims that iX is the largest digital agency worldwide
IBM just announced plans to buy German digital agency ecx.io for an undisclosed sum. Ecx.io has about 200 employees.
This marks IBM's third acquisition of a digital ad/design company.
IBM surprised the world when it bought Columbus, Ohio-based Resource/Ammirati, a well-known digital agency founded in 1981 with Apple as its first client.
Resource/Ammirati came to fame in 1999 with the Victoria’s Secret webcast fashion show during the Super Bowl. These days it's known for doing advertising and marketing projects for companies like Birchbox, DSW, Nationwide, Nestlé, Sherwin Williams, Toys “R”Us, etc.
IBM didn't disclose a purchase price but Resource/Ammirati has about 300 employees and 2014 revenue of $75 million, reports Columbus Business First.
Then, IBM bought another German agency, Aperto, a 300+ employee company that names companies like Airbus Group, Volkswagen and Siemens as clients.
All of these companies are joining the IBM iX unit, which now employs a whopping 10,000 people worldwide under Paul Papas (who has been with IBM since 2002), with 25 offices worldwide.
IBM claims that iX is the largest digital agency worldwide.
IBM is under a lot of pressure these days to turn itself around as its huge, cash-cow hardware business has been shrinking. CEO Ginni Rometty has been selling off those low-margin shrinking business units and laying off workers, while hiring or acquiring workers in growth areas, and launching partnerships with the likes of Apple, Twitter, Facebook, Tencent.
IBM doesn't talk as much about its digital agency business as it does about its machine-learning cloud service "Watson." But the company is clearly ramping its efforts up in this market for 2016. The talent wars for top designers are brutal, so IBM is shopping.