IBM to Break up 109-Year Old Company to Focus on Cloud Growth
DannyB writes:
IBM to break up 109-year old company to focus on cloud growth
International Business Machines Corp IBM.N is splitting itself into two public companies, capping a years-long effort by the world's first big computing firm to diversify away from its legacy businesses to focus on high-margin cloud computing.
IBM will list its IT infrastructure services unit, which provides technical support for 4,600 clients in 115 countries and has a backlog of $60 billion, as a separate company with a new name by the end of 2021.
[...] Investors cheered the surprise move by Chief Executive Officer Arvind Krishna, the key architect behind IBM's $34 billion acquisition of cloud company Red Hat last year, sending the company's shares up 7%.
[...] "IBM is essentially getting rid of a shrinking, low-margin operation given the cannibalizing impact of automation and cloud, masking stronger growth for the rest of the operation," Wedbush Securities analyst Moshe Katri said.
[...] Krishna [...] said IBM's software and solutions portfolio would account for the majority of company revenue after the separation.
In 109 years, technology may possibly change multiple times, and the company must adapt.
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