IBM will separate the infrastructure division, focusing on cloud services

According to the statement, IBM will allocate its infrastructure technology services division to a separate company. The split should take effect at the end of next year.

CEO Arvind Krishna called the change a “significant shift” in the company’s business model. He pointed out that the company sold its networking activities in the 1990s, the production of personal computers at the beginning of the millennium, and a semiconductor division about five years ago. Krishna also organized last year’s acquisition of cloud company Red Hat for $ 34 billion (CZK 787.1 billion).

In recent years, IBM has shifted its interest in the growth of cloud services to offset declining interest in software and seasonal demand for mainframe servers. Krishna, who took office in April, said the software and solutions would make up most of IBM’s revenue after the split.

The division that IBM has decided to become independent provides services, including technical support, to data centers. The working name of the new company is so far NewCo. In connection with the department, the company expects extraordinary expenses of USD 2.5 billion.

IBM expects revenue of $ 17.6 billion and adjusted earnings per share of $ 2.58 in the third quarter. This is in line with analysts’ forecasts, Reuters reported.

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