IBM to Spin-Off Managed Service Business and Will Focus on Hybrid Cloud, AI, Quantum Computing & Mainframe Tech
(NetworkedWorld) IBM plans to dedicate itself to hybrid cloud, AI, quantum computing, and mainframe technologies, and is breaking out its $19B Managed Infrastructure Services group in order to do so.
“Hybrid cloud and AI are swiftly becoming the locus of commerce, transactions, and over time, of computing itself. Our decision is also the logical next step in our pursuit of the $1 trillion hybrid cloud opportunity,” CEO Arvin stated in a blog about the move. He likened the move to Big Blue’s previous large divestitures such as its decision to get rid of its networking business in the 90s and PCs in the 2000s to focus on bigger things.
The acquisition of Red Hat for $34 billion in 2019 let IBM build its hybrid-cloud platform that suspports computing on-premises and in private- and public-cloud environments. “This was the first major step to seize this opportunity and underpins everything that has followed,” Arvin stated.
The move creates an as-yet-unnamed firm, tentatively dubbed “NewCo,” which won’t actually be created until 2021 but will quickly be a big provider of managed infrastructure services. It will employ about 90,000 staffers, have more than 4,600 clients in 115 countries—including more than 75% of the Fortune 100—have a backlog of $60 billion in orders, and more than twice the scale of its nearest competitor, IBM stated. That would include Accenture, Fujitsu and Huawei.