As IBM spins out a new company to help focus in two lucrative markets, the company’s CEO Arvind Krishna on Friday said that the yet to be named new company will have a separate leadership team in India. However, people working for IBM India have nothing to worry as the IBM CEO said that he expects the employees to be accommodated in one company or the other.
“I do not expect the creation of the new company to have any material impact in India,” Krishna told reporters in a call, adding that there will be nothing “controversial. This is not a restructuring, this is a spin out,” he said.
IBM on Thursday said that it will separate its Managed Infrastructure Services unit of its Global Technology Services division into a new public company. The yet to be named new company is currently codenamed “NewCo”.
The separation is expected to be achieved as a tax-free spin-off to IBM shareholders, and completed by the end of 2021. The creation of NewCo will help IBM focus on its open hybrid cloud platform, which represents a $1 trillion market opportunity, the company said.
“Focus normally allows for better utilisation of capital, better utilisation of skill, acquisition of right companies that serve the purpose of each of the two companies,” Krishna said.
IBM’s open hybrid cloud platform architecture, based on RedHat OpenShift, works with the entire range of clients’ existing IT infrastructures, regardless of vendor. The new company will be a managed infrastructure services provider.
IBM said that it has relationships with more than 4,600 technology-intensive, highly regulated clients in 115 countries, including more than 75 per cent of the Fortune 100, a backlog of $60 billion, and more than twice the scale of its nearest competitor.
IBM currently employs 380,000 people serving clients in 170 countries and India has the highest number of IBMers outside of the US — a key research and innovation hub for the tech giant that set up its first office in the country almost 26 years back.
Krishna, who guides IBM’s overall strategy in core and emerging technologies including Artificial Intelligence (AI), quantum computing, Blockchain, Cloud platform services, data-driven solutions and nanotechnology, has the task at hand to tap the growing talent pool in new-age technologies and leverage the true potential.
Today, IBM powers two of the largest telcos in India, nine out of 10 top banks, 2/3rd of milk and dairy products industry, country’s largest airport (traffic), etc are run and managed by IBM.
Krishna, an alumnus of Indian Institute of Technology, Kanpur (IITK) knows the potential the country has and has gone bullish on India, especially on the R&D and innovation to create for the world.
IBM was one of the first MNCs to recognize India as an innovation hub and set up its first Research lab in IIT Campus, Delhi in 1993 to provide back-end support to its global business.
Today, IBM’s four labs in India – India Research Labs, India Software Labs, IBM Systems Development Labs and Global Technology Services Labs – are innovation centers for global product development, new services and solutions.
IBM’s businesses in India include Cloud and Cognitive Solutions (including RedHat and Watson), Services, Systems, Security, The Weather Company (an IBM business), R&D labs and client innovation centres.