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IBM Splits Itself in Two

Big Blue is splitting its operations as part of an ongoing effort to become the world's top hybrid cloud and artificial intelligence (AI) provider.

In a major restructuring announced Thursday, IBM will become two companies. One will be focused on hybrid cloud and AI, and the other on its managed infrastructure business.

"Going all in on our open hybrid cloud platform and AI solutions will create value for our clients, our company, and our shareholders," said CEO Arvind Krishna in a post. "This change best positions IBM for improved growth."

The move comes nearly two years after IBM's acquisition of Red Hat. At the time, Krishna, then IBM's head of hybrid cloud, said the acquisition will make his company the world's leading hybrid cloud provider. IBM's goal, he said, "is to win in hybrid cloud, and win on the basis of open technologies, and in the end to provide a technology that makes life easier [for companies] with less complexity and a future proof investment."

That move may have helped IBM propel itself into the company of perennial cloud computing leaders Amazon Web Services (AWS), Microsoft Azure and Google Cloud in a recent Gartner Magic Quadrant report on cloud-based AI vendors.

The reorganization announced Thursday could be characterized as an extension of that initial goal announced in 2018.

"We have decided that the managed infrastructure services business of our [Global Technology Services] segment will become an independent company, which we're initially referring to as 'NewCo,'" Krishna said. "We expect the new company to be created sometime toward the end of 2021. IBM will sharpen its focus on its open hybrid cloud platform and AI capabilities. And the new company will focus on delivering managed infrastructure services."

About the Author

David Ramel is an editor and writer for Converge360.

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