IBM shares soar on plans to spin off its IT infrastructure unit and focus on the cloud business

said Thursday it would spin off its IT infrastructure unit into a new publicly traded company to focus its legacy business more on cloud computing, a high-margin segment that has seen a boost as companies increasingly ramp up their digital shift.The separation of the new company, temporarily called NewCo, will be completed by the end of 2021. IBM said it will manage and modernize client-owned infrastructures, which it says is a $500 billion market opportunity. J.P.

"We believe we can deliver strong growth within the company with the financial flexibility we will create with this transaction," CEO Arvind Krishna told CNBC's "IBM has trimmed its legacy businesses over the years to focus on cloud, aiming to make up for slowing software sales and seasonal demand for its mainframe servers.in April, said IBM's software and solutions portfolio will account for the majority of company revenue after the separation.

"IBM will focus on its open hybrid cloud platform and AI capabilities," Krishna said earlier Thursday in a prepared statement. "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 and shareholders.

"The success we've had with Red Hat gives us confidence that this is the right move," he added, calling the move a "significant shift" in the company's business model. IBM's Cloud and Cognitive Software segment, which includes Red Hat, produced $5.75 billion in revenue in itsIBM also provided preliminary financial results for the third quarter. The company said it expected third-quarter revenue of $17.6 billion and an adjusted profit per share of $2.

What? Must be another IBM joke like its old PC era. IBM strips itself to barebone before falling into its own coffin. Clouds is today operating architecture practices for SOA. Tomorrows will be different. People are talking virtual that was once the IBM MF backbone!

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