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A Third Of India Staff May Be Part Of New Entity

Amritsar, NFAPost: IBM Corp is splitting its business into two companies that would result in up to one-fourth of its India employees likely to be part of the new entity, IBM Chief Executive Officer Arvind Krishna said.

This split in business of the 109-year-old American IT company is to build focus on hybrid cloud and artificial intelligence (AI).       

According to the company, as part of this split, IBM will separate its Managed Infrastructure Services unit of its global technology services division into a new public company by the end of 2021. The business focussed on hybrid cloud and AI will be known as IBM, and name for the other entity is yet to be finalised.

The new public entity has more than 4,600 clients in 115 countries, and an order backlog of $60 billion, according to the company.

“Yes, we will have two entities in India at the end of this, but that is going to take a year to play out. And, I would expect that both people will find a place in one or the other.” Krishna said.

Though IBM has not disclosed the India headcount, it is estimated that the country accounts for about a third of its global workforce over 350,000. 

Krishna added that the split will have “no material impact” on India operations and that  IBM’s current India Managing Director Sandip Patel will continue to head one entity, while it will look for a new person to head the other.

Sectors such as telecom, banking, and government are driving the adoption of hybrid cloud in India, Krishna said.

“We are committed to our footprint in India. We also have a very large R&D presence in India and as our business begins to grow, we expect opportunity for people in India both in terms of employment and growth,” he said.

Krishna said IBM will focus on its open hybrid cloud platform and AI capabilities. “The new company will have greater agility to design, run and modernize the infrastructure of the world’s most important organizations. Both companies will be on an improved growth trajectory with greater ability to partner and capture new opportunities.”

He said that IBM was laser-focused on the $1 trillion hybrid cloud opportunity.

“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.”

With tighter integration and focus on its open hybrid cloud and AI solutions, IBM will move from a company with more than half of its revenues in services to one with a majority in high-value cloud software and solutions, the company said. IBM will also have more than 50% of its portfolio in recurring revenues.

As part of this strategic move, IBM said it is trying to “simplify and optimise its operating model for speed and growth. This includes streamlining its geographic model and transforming its go-to-market structure to better engage with and support clients.”

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