LONDON (ShareCast) - (Sharecast News) - International Business Machines (IBM) said it planned to spin off its IT infrastructure services unit to focus on rapidly-growing cloud computing business.
IBM on Thursday said said Thursday the new company, which already has relationships with 4,600 clients in 115 countries, would list by the end of next year with a new name.

New chief executive Arvind Krishna, who took over in April, is trying to reposition the iconic company and has already announced an unspecified number of job cuts as it deals with the impact of the Covid-19 pandemic.

The new company would be able to partner across all cloud vendors, providing the opportunity for stronger profits and cash generation, IBM said.

Last year IBM bought open-source software company Red Hat for $34bn in a bid to move into the cloud-computing market. "The success we've had with Red Hat gives us confidence that this is the right move," Krishna said.

"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.."

Krishna said IBM would focus on its open hybrid cloud platform and artificial intelligence capabilities, while the new company "will have greater agility to design, run and modernize the infrastructure of the world's most important organisations".

"Both companies will be on an improved growth trajectory with greater ability to partner and capture new opportunities - creating value for clients and shareholders."

IBM also on Thursday also reported third-quarter profit and revenue in line with Wall Street expectations, posting preliminary earnings from continuing operations of $1.89 a share, or $2.58 on an adjusted basis, on revenue of $17.6bn.

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