Focus on cloud services
The traditional American IT group IBM recently announced that it will split up.
The company intends to concentrate on cloud computing. At the same time, the business unit for IT services will be spun off into a new company. This also will be listed on the stock exchange. The spin-off should be completed by the end of 2021.
IBM sees a growing market for the cloud segment. Arvind Krishna, IBM Chief Executive Officer, speaks of a $1 trillion market opportunity for hybrid cloud applications. A hybrid cloud is a combination of public and private clouds. Krishna explains that customers’ needs evolve differently when they purchase application and infrastructure services, while acceptance of IBM’s hybrid cloud platform is increasing. He says now is the right time to create two market-leading companies that focus on what they do best.
IBM – Cloud, AI
In the future, IBM intends to focus on its open hybrid cloud platform and AI expertise. To this end, the company Red Hat was acquired two years ago.
According to the company, IBM’s cloud platform makes it easier to provide powerful AI functions to obtain decent data, among other things. IBM also cites security and a high level of expertise compared with the rest of the industry as further advantages. The company also points out its strong commitment to open source innovations.
IBM will evolve from a company that currently generates more than half of its revenue from services to a company that will stand for high-quality cloud software and solutions. The technology group plans to achieve a 50 percent share of recurring revenues.
New business unit – IT services
The divested business unit will be given a new name at a later date. This new company will focus on the management and modernization of the customer’s own IT infrastructure. According to IBM, this market is worth 500 billion dollars.
IBM expects that the new company will have greater flexibility in its field. There will also be a strategic partnership between the new company and IBM. It should also be possible for the company to cooperate with other cloud providers in order to gain further growth opportunities.