After divesting semiconductors five years ago, IBM announced that it would manage its "managed infrastructure services" under a new name. The company, which is slated to launch by 2021, is simply referred to as "NewCo" in the tech giant Press release.
IBM says "NewCo" will take the reins of the managed infrastructure services industry upon launch. This trust is mainly imbued with the flow of customers that the new company is expected to receive initially, thanks to the existing pool of IBM customers which includes 75 of the Fortune 100 companies.
Through "NewCo", IBM plans to deliver results to customers of its Global Technology Services, while focusing on the cloud segment. Indeed, according to IBM, the open hybrid cloud platform has the promise of being a $ 1 trillion market in the future.
IBM CEO Arvind Krishna, who replaced Ginni Rometty earlier this year, said the new strategy marked a "significant shift" in the company's operations.
Krishna also pointed out the company's history of divesting networking, PC and semiconductor businesses over the past decades, and hinted that the reason for the latest divestment was the same. According to him, these areas of intervention do not "necessarily play in the integrated value proposition".
As reported by Reuters Moshe Katri, analyst at Wedbush Securities, called IBM's decision to split its operations clever. In Katri's own words, the US tech company "is essentially getting rid of a shrinking, low-margin operation ... masking higher growth for the remainder of the operation."
The message IBM will split into two companies by 2021 to focus on cloud offerings first appeared on Fossbytes.
