IBM Divides Into Two Companies To Focus on Cloud and AI

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In a move to focus more on its cloud computing and augmented services, IBM has announced last week that it will be breaking its company into two. IBM’s legacy IT infrastructure services, which will become a separate company, is going to be handled by NewCo. It will spearhead its cloud service division that will cater to 4,500 clients globally. The tech giant believes that the split will enable them to concentrate in areas that offer greater potential for growth and increased revenue for the company. IBM’s “new division” is set to be launched by 2021.

Screenshot from Techspot

IBL News: IBM’s CEO, Arvind Krishna, is convinced that “To drive growth, our strategy must be rooted in the reality of the world we live in and the future our clients strive to build.

Screenshot from IBL News

IBL News reports that IBM  announced this weekend that it will split into two public companies, in a bid to focus more on higher-margin businesses like cloud computing and AI.

IBM –which currently has more than 352,000 workers – said it expects the separation to cost $5 billion.

The tech giant will list its legacy IT infrastructure services unit as a separate entity named NewCo by the end of 2021.

According to IBM, NewCo will have 90,000 employees and $19 billion in annual revenue. It will serve 75% of Fortune 100 companies when it makes its share market debut.

Techspot: IBM is creating a new company to handle its cloud IT service segment that will cater to over 4,500 clients

Screenshot form Techspot

Meanwhile, in a similar report by Techspot, IBM said the split will allow it to focus on areas with immense potential for growth. It has divulged that NewCo will be a new market leader in cloud IT-managed services right from the get-go. The legacy firm will take over service provision for over 4,500 clients spanning over 100 countries that are currently subscribed to the parent company.

NewCo will be leveraging IBM’s current innovative hybrid cloud architecture, which is powered by Red Hat OpenShift.

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