Bloomberg News

IBM Lands McDonald’s as Customer for Its Social Software

January 31, 2013

International Business Machines Corp. (IBM:US) signed on McDonald’s Corp. (MCD:US)’s South Africa division as a customer for its business-focused social-networking software, landing the highest-profile client yet for the product.

McDonald’s will have 8,000 employees in South Africa using the Connections software, IBM said today in a statement. The product is part of an effort to create internal networks for companies, letting employees use Facebook-style tools to communicate, sign off on documents and report expenses.

IBM aims to build on the McDonald’s contract by winning deals with other retail and food-services business. After years of sluggish revenue, the world’s biggest computer-services provider sees social-networking software as a source of growth. The company declined to give financial terms for the contract with McDonald’s, the largest fast-food chain by sales.

“It’s really going to attract more companies,” said Sandy Carter, vice president of social-business strategy for Armonk, New York-based IBM. “McDonald’s South Africa also demonstrates that the power of social has moved beyond major markets into the emerging opportunity.”

After a $1.3 billion acquisition of Kenexa Corp.’s human- resources software last year -- along with several data-analysis companies -- IBM is betting its social software can compete with offerings from Microsoft Corp. (MSFT:US), Salesforce.com Inc. and Jive Software Inc. By making it easier for employees to access and share data, social-networking services will help IBM make $16 billion from business analytics by 2015, the company has said.

IBM shares fell less than 1 percent to $203.07 at the close today in New York. The stock gained 4.2 percent last year, compared with a 13 percent gain for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • IBM
    (International Business Machines Corp)
    • $191.67 USD
    • -2.33
    • -1.22%
  • MCD
    (McDonald's Corp)
    • $94.56 USD
    • -1.39
    • -1.47%
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