IBM says it is breaking off a $19 billion chunk of its business to focus on cloud computing.
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The 109-year-old tech company said it is spinning off its managed infrastructure services unit into a new public company, temporarily named NewCo. The separation is expected to take effect by late 2021.
IBM CEO Arvind Krishna said the split will help IBM focus on its cloud platform and artificial intelligence, while the newly formed company will provide services to manage the infrastructure of businesses and other organizations.
IBM’s annual revenue was $77.1 billion last year. Krishna said in April at his first quarterly earnings call as CEO that the company will continue to eliminate software and services that don’t align with IBM’s top two focus areas for growth: cloud computing and artificial intelligence.
Once a household name for its personal computers, IBM shed its PC business in 2005 and has since become focused on supplying software services to big businesses, governments and other organizations. It has worked to strengthen its cloud computing business but has struggled to compete with top cloud rivals Amazon, Microsoft and Google.
