IBM to Spin Off Infrastructure Services Unit

IBM is undergoing a strategic transformation by splitting into two companies: one focused on hybrid cloud and AI, and the other on managed infrastructure services. This move aims to unlock growth by addressing a trillion-dollar market opportunity. The new company, temporarily named Newco, will have a strong market position and investment-grade balance sheet. Both companies will maintain a strategic relationship, allowing them to partner freely with others. Leadership and governance structures are being established, with a focus on managing risks and ensuring sustainable growth. The split is expected to be completed by late 2021, with continued focus on acquisitions and organic growth.

What is the primary focus of the first company after IBM's strategic split?

• Managed infrastructure services

• Hybrid cloud and AI

• Consumer electronics

• Financial services

What is the expected growth rate for the company focused on hybrid cloud and AI?

• No growth

• High single digits

• Mid single digits

• Low double digits

How does the CEO describe the valuation difference between cloud companies and information services companies?

• Cloud companies are valued lower

• Information services companies are valued higher

• Cloud companies promise a different valuation

• Both are valued equally

What is the relationship between the two new companies post-spinoff?

• They will be completely independent with no interaction

• They will compete directly in all markets

• They will have a deep strategic relationship

• They will merge back into one company

Who will remain with IBM after the spinoff?

• Jim Whitehurst and the managed infrastructure team

• The entire leadership team

• Jim Whitehurst and the CEO

• Only the CEO

What is the expected timeline for the spinoff to be completed?

• 6 months

• 1 year plus or minus a few months

• 2 years

• 3 months

What will IBM focus on during the spinoff period?

• Divesting major parts of the company

• Pausing all acquisitions

• Focusing on organic R&D and acquisitions

• Reducing workforce