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Monday 14 December 2020

*NEW RESEARCH* IBM and NewCo: The hard work starts here

For many years now, the pressure on established Software and IT services providers has been considerable. Cloud, and the services it enables, have created both opportunity and the urgent need to pivot hard towards new revenueibm streams. Big, Bold moves continue to be ‘order of the day’.

In October, we saw IBM announce that it would create a new company (named NewCo for the time being) to be spun-off as an independent entity and listed on the stock exchange. It is a major move and part of a broader strategy to remodel the firm and position it away from low growth, heritage markets.

The challenges faced by the two entities as they split - and then get themselves into better shape to flourish - are notable. Considerations include operational and financial improvements, messaging/positioning, company culture and staff/skills, partner ecosystems, customer retention and additional M&A. The challenges are extensive, but radical and ongoing change is required to cement the position IBM is claiming as a $59bn “hybrid cloud platform and AI company”.

IBM CEO, Arvind Krishna, and his team will be under no illusion that the road ahead will be tough. And we have no doubt that it’s going to be a rough ride for many staff members too.

In IBM and NewCo: The hard work starts here, Kate Hanaghan looks at some the challenges IBM and NewCo face, and some of the issues they will need to address, including in specific areas such as Software, Public Cloud and partnerships.

This research note is available to subscribers of TechSectorViews and the Foundation Service. Download the report HERE or contact Deb Seth for subscription information.

Posted by HotViews Editor at '09:30' - Tagged: cloud   hybrid   spinoff