IBM is doubling down on its bet that legacy infrastructure and its accompanying services will not grow as it once did. As companies continue with their modernization to digital infrastructure, they will turn to outsourced hard infrastructure and use cloud services.
IBM is in an arms race competing against Microsoft and Google in cloud services. The move to spin off the segment should enable it to focus on growing its cloud services faster than its competitors.
In a statement, IBM CEO CEO Arvind Krishna said the tech giant is “laser-focused on the $1 trillion hybrid-cloud opportunity. Client buying needs for application and infrastructure services are diverging, while adoption of our hybrid cloud platform is accelerating.”
“Now is the right time to create two market-leading companies focused on what they do best. IBM will focus on its open hybrid cloud platform and AI capabilities. NewCo will have greater agility to design, run, and modernize the infrastructure of the world’s most important organizations. Both companies will be on an improved growth trajectory with greater ability to partner and capture new opportunities – creating value for clients and shareholders,” added Krishna.
