IBM TO ACCELERATE HYBRID CLOUD GROWTH STRATEGY AND EXECUTE SPIN-OFF OFMARKET-LEADING MANAGED INFRASTRUCTURE SERVICES UNIT•
IBMto focus on hybrid cloud growth, a $1 trillion market opportunity•New public company tolaunch as world’s #1 Managed Infrastructure Services provider •IBMalso announces preliminary 2020 third-quarter resultsARMONK, N.Y., October 8, 2020 --IBM(NYSE: IBM) announcedtodayitwillaccelerate its hybrid cloud growthstrategytodrive digital transformations for its clients. Additionally, IBMwill separateits Managed Infrastructure Services unit of its Global Technology Services division into a new public company(“NewCo”). Thiscreatestwo industry-leading companies, eachwith strategicfocus andflexibility to drive client and shareholder value. The separation is expected to be achieved as a tax-free spin-off to IBMshareholders,and completed by the end of 2021.“IBMislaser-focused on the $1 trillion hybrid cloud opportunity,” said Arvind Krishna, IBM Chief Executive Officer.“Client buying needs for application and infrastructureservicesare diverging,whileadoption of our hybrid cloud platformis accelerating. Now is the right time to create two market-leading companies focused on what they do best. IBMwill focus on its open hybrid cloud platform and AI capabilities. NewCo 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 –creating value for clients andshareholders.” "We have positioned IBMfor the new era of hybrid cloud," said Ginni Rometty, IBM Executive Chairman. "Our multi-year transformation created the foundation for the open hybrid cloud platform, which we then accelerated with the acquisition of Red Hat. At the same time, our managed infrastructure services business has established itself as the industryleader, with unrivaled expertise in complex and mission-critical infrastructurework. As two independent companies, IBMand NewCo will capitalize on their respective strengths. IBMwill accelerate clients’digital transformation journeys, and NewCo will accelerate clients’ infrastructure modernization efforts. This focus will result in greater value, increased innovation, and faster execution for our clients.”IBM, aLeading Hybrid Cloud and AI CompanyIBMwill focus on its open hybrid cloudplatform, which represents a$1 trillionmarket opportunity. Building on IBM’s hybrid cloud foundation, the company acquired Red Hat to unlock the full value of the cloud for clients,further acceleratingadoption of theplatform. This platform facilitates the deployment of powerful AI capabilitiestoenable the power of data, application modernization services, and systems. These are allunderpinned by the security, unmatched expertise in industry verticals, and deep commitment to open source innovation that clients expect from IBM.