IBM to split into two companies

IBM is splitting into two separate publicly traded companies - the year-long drive of the world's first major computer company to divest from its legacy businesses and focus on high-margin cloud computing. IBM will outsource the entity that manages the IT infrastructure for customers, including support for data centers. This unit will have a new name by the end of next year.
Chief Executive Officer Arvind Krishna, who last year also led IBM's acquisition of the $ 34 cloud company Red Hat, described the move as a "significant change" in the 109-year-old company's business model.
Over the past few years, the company has focused on cloud growth to offset the slowdown in software sales and seasonal demand for its mainframe servers.
Investors welcomed the sale, sending the company's shares up nearly 9% at the start of trading on Thursday.
Video transcript
- IBM splits into two separate public companies and completes years of efforts by the world's first major computing company to move away from its legacy businesses to focus on high-margin cloud computing. IBM will outsource the entity that manages the IT infrastructure for customers, including support for data centers. This unit will have a new name by the end of next year.
Arvind Krishna, chief executive officer who also led IBM's acquisition of the $ 34 billion cloud company Red Hat last year, described the move as a significant change in the 109-year-old company's business model. Over the past several years, the company has focused on cloud growth to offset the slowdown in software sales and seasonal demand for its mainframe servers.
[Bell bell]
Investors welcomed the sale, sending the company's shares up nearly 9% at the start of trading on Thursday.
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