IBM CEO Arvind Krishna Bets Entire Company on Hybrid Cloud Future
IBM spins out its $19 billion legacy infrastructure services business to focus entirely on cloud computing. CEO Arvind Krishna makes this decisive move as cloud revenue grows 30 percent while overall company revenue declines.
IBM spins out its $19 billion legacy infrastructure services business as CEO Arvind Krishna fully commits the company to a hybrid cloud strategy. This decisive move separates the slower-growing managed infrastructure segment from the core company, allowing IBM to concentrate on the cloud vision that began with the $34 billion Red Hat acquisition in 2018.
The financial data clearly drives this strategic shift. While overall IBM revenue drops 5.4 percent to $18.1 billion in the most recent earnings report, cloud revenue surges 30 percent to $6.3 billion and Red Hat-derived revenue increases 17 percent. Krishna recognizes that the future relies entirely on these growing cloud segments rather than the declining legacy operations.
Despite this positive momentum, IBM still trails significantly behind public cloud market leaders. With only 4 or 5 percent market share, IBM sits behind Amazon, Microsoft, and Google, and even falls behind Alibaba. Like Oracle, IBM faces a long journey to catch the dominant cloud providers as it restructures to compete more effectively in the hybrid cloud market.