IBM Lands McDonald’s as Customer for Its Social Software

International Business Machines Corp. (IBM) signed on McDonald’s Corp. (MCD)’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), 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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