109 years old company will be transformed to focus on hybrid cloud growth

On October 8th, International Business Machines Corporation (IBM) announced that will separates its Managed Infrastructure Services unit of its Global Technology Service division into a new public company (unnamed and it is described as “NewCo” in the press release).

In the press release, Arvind Krishna, IBM Chief Executive Officer mentioned “IMB is laser-focused on the $1 trillion hybrid cloud opportunity.” And “Client buying needs for application and infrastructure services are diverging, while adoption of our hybrid cloud platform is accelerating. Now is the right time to create two market-leading companies focused on what they do best. IBM will focus on its open hybrid cloud platform and AI capabilities. NewCo will have greater agility to design, run and modernize the infrastructure of the world’s most important organizations. Both companies will be on an improved growth trajectory with greater ability to partner and capture new opportunities – creating value for clients and shareholders.”

Who is International Business Machines Corp (IBM)?

According to Reuters, the company profile of IBM is described as

International Business Machines Corporation (IBM) is a technology company. The Company operates through five segments: Cognitive Solutions, Global Business Services (GBS), Technology Services & Cloud Platforms, Systems and Global Financing. The Cognitive Solutions segment delivers a spectrum of capabilities, from descriptive, predictive and prescriptive analytics to cognitive systems. Cognitive Solutions includes Watson, a cognitive computing platform that has the ability to interact in natural language, process big data, and learn from interactions with people and computers. The GBS segment provides clients with consulting, application management services and global process services. The Technology Services & Cloud Platforms segment provides information technology infrastructure services. The Systems segment provides clients with infrastructure technologies. The Global Financing segment includes client financing, commercial financing, and remanufacturing and remarketing.

What is cloud computing?

Based on the beginner’s guide of cloud computing in Microsoft Azure page, cloud computing is defined as

Simply put, cloud computing is the delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale. You typically pay only for cloud services you use, helping you lower your operating costs, run your infrastructure more efficiently, and scale as your business needs change.

In the same guideline, there are several benefits of cloud computing such as Cost, Speed, Global Scale, Productivity, Performance, Reliability and Security.

Cloud computing is one of key technologies in industry 4.0 era

Whether we do notice or do not, we use cloud computing related services such as e-mail, communication and game, which are called like Software as a Service (SaaS). Also, we use other types of cloud computing services, such as Platform as a Service (PaaS: ex. servers, storage, network, and databases) and Infrastructure as a Service (IaaS: ex. servers and virtual machines (VMs), storage, networks, operating systems). In other words, we could say that modern life cannot exist without cloud computing and it is one of the essential and critical technologies in industry 4.0 era. Therefore, the decision of IBM is quite reasonable and the share price actually was increasing after the announcement.