“IBM said it will spin off its managed infrastructure services unit into a new public company so it can focus on its hybrid cloud business, which includes Red Hat.”
“The new company, which will be tax free to shareholders, will focus on managing data centers and cloud infrastructure for clients.
IBM also said it will report third quarter sales results better than expectations. IBM said it will report non-GAAP third quarter earnings of $2.58 a share on revenue of $17.6 billion. Wall Street was looking for non-GAAP third quarter earnings of $2.58 a share on revenue of $17.54 billion. IBM shares were up 10% on the news.”
“There will be a lot of details to be worked out as the deal isn’t closing until the end of 2021, but at a high-level IBM’s plan looks like this:
Managed Infrastructure Services, which resides in IBM’s Global Technology Services division, will be spun off tax-free.
The new company will design, run and modernize infrastructure for clients.
IBM will focus on its cloud platform led by Red Hat as well as growth markets like artificial intelligence and hybrid cloud.
Big Blue said it will streamline its operating model, consolidate shared services and simplify without managed infrastructure services.
When the managed infrastructure company is spun off, IBM will transition from being a company with half its revenue in services to one with more than 50% of sales from recurring revenue…” Read the full article here.
Source: IBM to spin off its managed infrastructure unit to focus on Red Hat, hybrid cloud; sees Q3 sales ahead of estimates – By Larry Dignan, October 8, 2020. ZDNet.