Top beancounters have warned that IBM’s managed infrastructure services spin-off Kyndryl will have a rough start.
IDC senior research manager for European services Matthew Wilkins said Kyndryl will face “fierce competition” from managed cloud service providers. This will be felt particularly across Europe, which boasts a wide variety of experienced and knowledgeable players in the market.
Public cloud providers expanding their services portfolios will pose a threat to the newly spun-off company, he warned.
While Kyndryl will be seeking to built on its existing IBM contracts, customers who signed those contracts will be a little nervous about handing over the trade to someone different.
Wilkins warns that it will be “very important” for IBM and Kyndryl to keep their existing customers informed.
This transparency will especially apply to customers that have signed long-term complex outsourcing and managed service deals with IBM that cover a wide range of services, including infrastructure management and application- or cloud-related services, he said.
Canalys chief analyst for channels analysis Alastair Edwards said that the creation and unshackling of the Kyndryl entity from IBM and its larger, more traditional infrastructure business frees the new entity up to work with a “much broader set” of technology vendors.
Removing that can give them greater flexibility and the agility to focus on what they’re really interested in, which is obviously cloud, AI, and other technology areas that they’re doubling down on,” Edwards says.
Edwards said that Kyndryl will definitely benefit from being less physically tied into the IBM portfolio – with the possibility of forming scalable service offerings with vendor partners from HP to Dell.
It could be more attractive to a much broader set of large enterprise infrastructure provider sort of partners, who previously saw IBM as directly competing he said.
In the long term, Kyndryl is a move towards the space conventionally inhabited by the Accentures and CapGeminis of the world or lumped in with the global systems integrators. Any overlap can create more confusion for customers on vendor choices and solutions, Edwards said.
He rules out Kyndryl staying focused on managed infrastructure services for long and the outfit will not have a “massive impact” on the UK mid-market channel, unless it looks to team up with specialists in specific areas such as cloud or cybersecurity.
Channel overlap is likeliest at the high end. For example, in large enterprise accounts with a lights-off computer centre managed by the top four or five biggest channel partners, he suggests.
