RESEARCH TRIANGLE PARK – IBM is spinning off part of its Global Technology Services division as a new company with a focus on providing infrastructure services while keeping its cloud computing group, the tech giant announced early Thursday.
Investors liked the news, sending IBM (NYSE: IBM) shares up some 5% in pre-market hours trading.
“Now is the right time to create two market-leading companies focused on what they do best,” said IBM Chief Executive Arvind Krishna in a statement. “IBM will focus on its open hybrid cloud platform and AI [artificial intelligence] capabilities. NewCo will have greater agility to design, run and modernize the infrastructure of the world’s most important organizations.”
A spokesperson for IBM confirmed to WRAL TechWire via email after the announcement some details about “NewCo.”
“We expect that the vast majority of employees will fit for roles in NewCo or in IBM, but we’ll complete our planning over the next few months and will advise accordingly,” the spokesperson said when asked about job assurances.
IBM likely to cut jobs in $2.5B cost charges as part of ‘NewCo’ spinoff
Krishna said IBM “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.”
The “NewCO” as he described it is part of the GTS group which has a significant operation in RP, which is one of IBM’s largest campuses.
Hybrid cloud services – which offers clients the ability to mix and match public and prive offerings – is a key part of IBM’s cloud offerings which includes technology and services provided by Raleigh-based Red Hat.
“IBM’s open hybrid cloud platform architecture, based on RedHat OpenShift, works with the entire range of clients’ existing IT infrastructures, regardless of vendor,” IBM explained. “This platform allows clients to “write-once/run-anywhere,” and enables a hybrid cloud approach that drives up to 2.5 times more value for clients than a public cloud-only solution.”
IBM closed on its $32 billion acquisition of Red Hat in July 2019 with a growing emphasis on cloud computing being a crucial part of that deal.
