IBM has said it plans to split its business in half by spinning off its infrastructure services unit into a separate public company.
The big idea is to create two separate companies, each with its own strategic focus by the end of 2021.
IBM CEO Arvind Krishna said that “now is the right time to create two market-leading companies focused on what they do best”.
The new company will have greater agility to design, run and modernise the infrastructure of the world’s most important organisations, Krishna believes. Both companies will be on an improved growth trajectory with greater ability to partner and capture new opportunities – creating value for clients and shareholders, he said.
IBM executive chairman Ginni Rometty said that the company’s managed infrastructure services business “has established itself as the industry leader, with unrivalled expertise in complex and mission-critical infrastructure work. As two independent companies, IBM and NewCo will capitalise on their respective strengths, she said, adding that the NewCo “will accelerate clients’ infrastructure modernisation efforts”, whatever on earth that means.
Meanwhile, IBM is to focus entirely on its AI capabilities and the hybrid cloud, which Krishna described as a $1 trillion opportunity.
IBM Systems, its mainframe division, will remain part of IBM, where the company will “continue to drive the innovation in hardware that enterprises rely on for their most mission-critical computing needs”. Whatever that means.
The company announced that it will accelerate its hybrid cloud growth strategy in order to streamline its clients’ digital transformation processes. Whatever that means.
Rometty said that IBM has been set “for the new era of hybrid cloud” and credited the company’ acceleration of its open hybrid cloud platform to its acquisition of Red Hat, which was snapped up for approximately $34 billion in 2018.
