IBM and NewCo: The hard work starts here

In October, IBM announced it would create a new company (NewCo) 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 what is required to cement the position IBM has pitched as a $59bn “hybrid cloud platform and AI company”.

This research note 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 and Public Cloud.

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