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IBM Goes All In on Hybrid Cloud/AI, Will Spin Off Managed Infrastructure

IBM announced it's splitting into two companies, one focused on hybrid cloud computing and artificial intelligence (AI) and one on managed infrastructure services.

"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."

IBM's focus on hybrid cloud computing and AI comes after it purchased Red Hat, a move announced back in 2018.

At the time, Krishna, then IBM's SVP 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 AWS, Microsoft Azure and Google Cloud in a recent Gartner Magic Quadrant report on cloud-based AI vendors.

[Click on image for larger view.] Gartner's "Magic Quadrant" for cloud-based AI vendors (February 2020).

But apparently the company is aiming even higher, as the spinoff/reorganization announced today (Oct. 8) could be characterized as an extension of that 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."

More details are included in a post authored by Krishna and this news release.

About the Author

David Ramel is an editor and writer for Converge360.

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