Oct 09, 2020 10:03:00

IBM spun off into cloud business and infrastructure services business

IBM , which provides computer-related products and services, announced that it will be spun off into a cloud business and an infrastructure services business at the end of 2021.

Accelerating our future and growth strategy
https://newsroom.ibm.com/Accelerating-our-future-and-growth-strategy

IBM to split into two companies by end of 2021 | Ars Technica
https://arstechnica.com/information-technology/2020/10/ibm-to-split-into-two-companies-by-the-end-of-2021/

IBM has announced a policy to split the high-margin cloud business and the low-margin infrastructure services business and operate them as separate companies. IBM CEO Arvind Krishna emphasized the company's spin-off as a 'significant change' in a conference call for investors.

Krishna said, 'We sold our network business in the 90's and our PC business in the 2000's. The semiconductor business did not always meet our integrated value proposition, so we sold it five years ago (2014). So far, IBM has sold businesses that are a drag on its business.

After the spin-off, IBM will be in charge of the cloud business with high profit margins, but another company will be in charge of the infrastructure services business with low profit margins. At the time of writing the article, there is no official name for the new company, only 'New Co (new company)' is written. The spin-off is expected to bring IBM sales to $ 59 billion and the new company to $ 19 billion.

Regarding the spin-off, 'The new IBM in charge of cloud business will focus on an open hybrid cloud platform with a market size of 1 trillion dollars (about 100 trillion yen), and the new company will become the world's leading infrastructure service provider '. The new company will own all of

IBM Global Technology Services ' existing infrastructure clients, which means that about 75% of Fortune 100 companies will be customers.

'IBM is essentially withdrawing from shrinking low-margin businesses, hiding the stronger growth of the rest of the business, considering automation and cloud co-eating,' said Moshe Katri, an analyst at Wedbush Securities. We are analyzing the movement of IBM's spin-off.

At the time of writing the article, IBM has more than 350,000 employees, but the company will be spun off by the end of 2021, and the new company will have about 90,000 employees.