The Strategist

IBM to spin off managed infrastructure services into a separate public company

10/09/2020 - 03:43

IBM has announced an upcoming business reorganization. This will include reorienting the company to the cloud business and spinning off the Managed Infrastructure Services division into a separate public company.

Patrick via flickr
Patrick via flickr
According to a press release, the new company, whose name has yet to be found, will become the global leader in the IaaS market. It already has more than 4.6 thousand clients from 115 countries, including the vast majority of Fortune 100 companies, and the new company's order book is estimated at $ 60 billion.

By spinning the business off into a separate company, IBM's new CEO Arvind Krishna, who took over in April this year, is trying to bring the corporation back to revenue growth. Over the past eight years, IBM's sales have plunged more than 25% due to heightened competition from giants like Amazon and Microsoft in the cloud computing market. The new company will be able to independently operate in the IaaS market, demonstrating more positive financial results.

IBM plans to complete the spin-off of the business by the end of 2021. Against the backdrop of this news, IBM shares at the opening of trading rose by about 7.5%.


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