Some businesses split up like “cell division”, gene re-engraving, after reproduction benefits, profits, synergies maximize, the moths accumulate deeper and deeper, while others split more like broken arms to survive, the situation forced the bottom, IBM is obviously more like the latter. Eleven long vacation, “100-year-old shop”, “blue giant” IBM and 叒叕 announced that the business split.
U.S. time October 8, according to multiplemedia reports, IBM will break up the traditional technology services business, accelerate the transition to cloud computing, the future focus on the cloud and AI’s main channel.
It is understood that IBM business includes cloud and cognitive software business, global enterprise consulting services business, global information technology services business, systems business, financing business. The upcoming spin-off of the traditional technical services business, IBM’s IT infrastructure services business, helps enterprise users maintain and upgrade their computing businesses with annual revenues of approximately $19 billion. After the split, it will be listed separately and temporarily named NewCo.
The remaining business, cloud business, hardware, software, and consulting services, accounts for 75% of IBM’s total revenue and will remain under IBM. IBM’s re-splitting was largely due to the continued contraction of traditional legacy businesses, masking strong growth in new businesses, including the cloud, and long-term drag on IBM’s overall revenue performance, disappointing capital markets.
Arvind Krishna, IBM’s new Indian-American CEO, was also forthcoming, saying ibm was “splitting” mainly to unlock ibm’s growth potential, using the cloud and AI as growth engines. In Krishna’s view, “it’s all Red Hat’s courage and confidence in IBM.” “
Arvind Krishna, IBM’s new Indian-American CEO. Twitter.
“Switzerland” in the cloud is not good.
IBM’s $34 billion acquisition of Red Hat in 2018 is another explosion in open source and cloud computing following Microsoft’s announcement of its acquisition of GitHub. IBM’s acquisition of Red Hat has a “buzz” effect that can be seen in two. In terms of transaction value, $34 billion is the largest technology acquisition in the world, making it the third largest acquisition case in the history of DELL’s purchase of EMC and Avago’s acquisition of Broadcom.
In terms of Red Hat’s value, Red Hat, as an open source solution provider, drives enterprise IT with open source technologies such as Linux and Kubernetes, which manage containerized applications on multiple hosts in the cloud platform.
“Red Hat Linux is a Linux-based operating system designed by Red Hat, which is widely used in cloud servers. Red Hat advocates open source technology to unlock the potential of hybrid and multi-cloud, where users can switch between different public cloud brands at any time. Zhang Xiaorong of the Institute of Deep Science and Technology told Geekpark.
Further, in today’s traditional IT-to-cloud migration, Red Hat has the key technology of hybrid cloud and cloud, which is the bridge between public and private clouds. For example, containers, Kubernetes technology is the “favorite” of the hybrid cloud and multi-cloud markets, and Red Hat’s container coordination platform, OpenShift, based on Kubernetes, integrates a range of management tools and security features and is a key platform for impacting enterprise productivity.
All this was done under the leadership of IBM CEO Krishna, and the acquisition of Red Hat became a key event in IBM’s history.
When Krishna succeeded Ginni Rometty as IBM’s new CEO earlier this year, Krishna identified two of IBM’s strategies for the future, hybrid cloud and AI artificial intelligence. “Make Red Hat OpenShift the default choice for hybrid clouds.”
At the same time, Krishna believes that there is plenty of room for cloud and AI growth, with “IBM’s journey to the cloud is only 20-25% and only 4% from AI.” “
Through the hybrid cloud path, IBM’s goal of being the “Swiss” in the cloud market is clear, but is it really as easy as Krishna describes it?
IBM has completely lost its ticket to the public cloud market. Data from multiple third-party organizations show that the global public cloud market is firmly positioned, with 3A, with Amazon AWS, Microsoft Azure, and Alibaba Cloud accounting for more than half of the global market share. With the current decline in public cloud dividends, hybrid and cloudy clouds will be the next wave of cloud markets.
But the hybrid cloud and multi-cloud markets are equally competitive. Red Hat will compete with companies such as Microsoft, Oracle, VMware, and Pivotal in operating system products, middleware, virtualization, and cloud technology. “In the virtualization tools, operating systems, middleware, service programs and management portfolio products, there are many enterprises using Microsoft products.” Zhang Xiaorong said.
On the hybrid cloud and multi-cloud development map, the U.S. and Europe are the largest markets, and IBM’s main battlegrounds will be focused on this. Many overseas analysts believe that even if IBM owns Red Hat, it will not be able to compete head-on with mainstream cloud computing vendors such as Amazon AWS and Microsoft Azure.
The years IBM missed.
Looking back at IBM’s 109-year history, it’s not the first time the split has taken place.
As Krishna said on a conference call, “IBM spun off its networking business in the 1990s, its PC business in the 1990s, and its semiconductor business about five years ago because it was not in line with the value concept of IBM business consolidation.” “
IBM continues to adapt to the rhythm of the times, but also constantly flooded by the times, crushed, become the innovation market “abandoned.”
In 2002, Amazon launched the AWS platform to provide tools and services to developers. In 2006, Amazon officially launched AWS with three simple service products. Microsoft Azure and Google Cloud also launched public cloud service products around 2010.
Although IBM entered the cloud computing market not too late, in 2007 it teamed up with Google to launch a cloud computing course and launch a “blue cloud” cloud computing business solution. In 2013, we began discussing hybrid and private cloud strategies. But in fact, from the 2000s to the 2010s, IBM was busy “slimming down” and “selling”, spun off its meager PC business, its x86 server business, and sold it to Lenovo. It doesn’t put a lot of resources and money into cloud computing.
“IBM is not seriously invested in the public cloud, and most of the resources are in technology, business services, and some IT services around the cloud.” IDC analyst Zhou Zhengan said.
Amazon AWS, which has a first-in-the-out advantage, turned a profit in 2015, growing more than the market expected. IBM suddenly realized the importance of cloud strategy, this year, IBM launched more than a dozen cloud-related acquisitions to familiarise the cloud business. A year later, IBM officially announced the cloud transformation.
However, the transformation has had little effect. In addition to IBM’s hardware vendor attributes and limited customer resources, IBM is betting on cloud direction errors. For example, there is no investment in data centers, advertising blockchain, AI artificial intelligence, and taking a bias. IBM’s share of the cloud market does not rise or fall and becomes a different category.
IBM missed the era of cloud computing.
In 2011, IBM Watson AI beat two human contestants in Dangerous Edge and announced that medical care would be Watson’s main application. IBM entered AI earlier, but overestimated the potential of AI healthcare, which is highly controversial. The healthcare system is extremely complex, and Watson’s machine learning style doesn’t match the way doctors work.
Watson systems are extremely closed, with no third-party system integrators and no software development kits. Like a “black box”, outputs at one end. Nor is it good for IBM in terms of commercial returns. James Kisner, an analyst at Jefferies, once said, “Watson will never be able to contribute significant revenue to IBM, nor will IBM be able to recover its costs from AI investments.” IBM lost out to Amazon, Microsoft, Google and even hundreds of start-ups in the AI programming talent competition. “
IBM missed the third wave of AI.
Microsoft, the software giant that is also in transition, has been comparing it to IBM. Microsoft has also missed key nodes, including the mobile Internet, from initially just one percent of IBM’s size to surpassing IBM, with a market capitalisation of more than trillion dollars, and Microsoft, which originated in the Satya Nadella era, embraced cloud computing and open source.
Today IBM is also on the path to cloud and open source, and how effective this will be remains unknown. As Daryl Plummer, head of cloud computing research at Gartner, says, “If IBM were to break up into two, it would be a turning point in IBM’s reborn, similar to Microsoft.” If it doesn’t work, it will be a turning point in IBM’s decline. “