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IBM to split into two

IBM to split into two

International Business Machines has announced its decision to split into two public companies recently. This decision has been taken to concentrate on profitable businesses like artificial intelligence and cloud computing.

As per the announcement, a new company will be coming up next year which will be focussing on IT infrastructure called NewCo. The company will get a permanent name next year. This whole process will cost around US$5bn. As per the reports, this company will start functioning next year with 90,000 employees. This suggests an entry of another competitor in this field, which is currently dominated by Amazon Web Services and Microsoft.

This attempt by the company shows that the ideas of businesses go on changing from time to time. A company cannot successfully run without bringing about changes in the ideas. This is a move towards more profitable activities. The splitting of IBM is a shift of the world’s biggest computing firm away from the traditional ideas.

To ensure growth, the leaders behind the firm need to understand the reality of the present and the future. In today’s world, Artificial intelligence is the most significant aspect in each and every spheres of life. The Chief Executive of IBM, Arvind Krishna also shared his views regarding the growing importance of hybrid cloud and AI.

After the announcement on Thursday, IBM’s shares went up by more than 7%. The pandemic has resulted in heavy losses for IBM. It is actually since long before the crisis that IBM is struggling to survive. Sales have fallen around heavily in the last decade. Last year witnessed a fall of 6.1% in the sales of service division.

As said by Arvind Krishna, NewCo will have an annual revenue of 19bn. The company will be serving 75% of Fortune 100 companies. It is all set to have a successful debut in the share market next year.

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