IBM to split into IT business and cloud computing company

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Shares in the 109-year-old computing firm went up 7% as it announced it will spin off its low margin IT infrastructure unit

Bengaluru — IBM is splitting itself into two public companies, capping a years-long effort by the world’s first big computing firm to diversify away from its legacy businesses to focus on high-margin cloud computing.

Shares of the company were up 7% in early trading on the move by CEO Arvind Krishna, who also engineered IBM’s $34bn acquisition of cloud company Red Hat last year. In a blog, Krishna called the move a “significant shift” in the 109-year-old company’s business model. The company has shifted focus to cloud growth in recent years, aiming to make up for slowing software sales and seasonal demand for its mainframe servers.

 

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