With IBM Corp. dividing its business into two companies to focus on hybrid cloud and artificial intelligence (AI), up to a quarter of its Indian employees are expected to be part of the new entity, Arvind Krishna, CEO of IBM he said on Friday.
While IBM does not disclose India’s workforce, the country is estimated to account for about a third of its global workforce of more than 350,000.
The split “will not have a material impact” on the Indian operations, Krishna said. Sectors such as telecommunications, banking and government are driving the adoption of the hybrid cloud in India, he added.
As part of this division, IBM will separate its Managed Infrastructure Services unit from its global technology services division into a new public company by the end of 2021. The new public company, yet to be named, has more than 4,600 clients in 115 countries. and an order book of $ 60 billion, according to IBM.
Krishna, the first Indian-born executive to lead the 108-year-old American IT giant, has been trying to change the company by focusing on the hybrid cloud since taking over the lead role in January. His focus on the cloud comes as no surprise, as until last year, he led IBM’s cloud and cognitive software unit and was the lead architect of Red Hat’s $ 34 billion acquisition, which was completed in the year. past.
“IBM is focused on the $ 1 trillion hybrid cloud opportunity,” Krishna said. “Customer purchasing needs for infrastructure and application services are divergent, while adoption of our hybrid cloud platform is accelerating. Now is the right time to create two markets: leading companies focused on what they do best.” .
Speaking of the opportunity in India, Krishna said, “We are committed to our footprint in India. We also have a very large R&D presence in India and as our business begins to grow we look forward to opportunities for people in India both in terms of employment and growth. “
Krishna said that IBM will focus on its open hybrid cloud platform and artificial intelligence capabilities. “The new company will have greater agility to design, execute and modernize the infrastructure of the most important organizations in the world. Both companies will be on an enhanced growth trajectory with a greater ability to partner and capture new opportunities. “
With tighter integration and a focus on its open hybrid cloud and artificial intelligence solutions, IBM will move from a company with more than half of its revenue in services to one with a majority in high-value cloud solutions and software, the company said. IBM will also have more than 50% of its portfolio in recurring revenue.
Analysts believe it is a step in the right direction. “This move reflects the tough decision IBM made years ago when it exited its PC business and sold to Lenovo. There is power in focus and growth is much more likely when an entire company is aligned with selected areas of core strength and importance, “said Sanchit Vir Gogia, CEO and chief analyst, Greyhound Research.
As part of this strategic move, IBM said it is trying to “simplify and optimize its operating model for speed and growth. This includes streamlining its geographic model and transforming its go-to-market structure to better engage and support customers. “
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