Skip to main content

IBM set to spin off managed infrastructure services to focus on hybrid cloud

(Image credit: Image Credit: Majestic B / Shutterstock)

Next year, IBM (opens in new tab) will split into two separate public companies, according to reports.

One part of the business will focus on hybrid cloud and artificial intelligence (AI), and is expected to be led by Red Hat, while the other part will focus more on legacy IT infrastructure.

We still don't know much about the new company, but it will reportedly handle managed infrastructure services, become operational next year and be spun off tax-free.

According to the BBC (opens in new tab), the newly formed organization will be named NewCo.

“We divested networking back in the 1990s, we divested PCs back in the 2000s, we divested semiconductors about five years ago because all of them didn’t necessarily play into the integrated value proposition,” said IBM CEO Arvind Krishna.

To execute the process, IBM (opens in new tab) will have to shell out approximately $6.5 billion. It will deliver roughly $59 billion in revenue after the spin-off, with NewCo reaching $19 billion in sales, according to ZDNet (opens in new tab).

NewCo is expected to have 4,600 “highly regulated” customers in more than 100 countries, as well as 90,000 employees.

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.