IBM To Split Into Two Companies By End Of 2021

from ars technica

IBM announced this morning that the company would be spinning off some of its lower-margin lines of business into a new company and focusing on higher-margin cloud services. During an investor call, CEO Arvind Krishna acknowledged that the move was a “significant shift” in how IBM will work, but he positioned it as the latest in a decades-long series of strategic divestments.

“We divested networking back in the ’90s, we divested PCs back in the 2000s, we divested semiconductors about five years ago because all of them didn’t necessarily play into the integrated value proposition,” he said. Krishna became CEO in April 2020, replacing former CEO Ginni Rometty (who is now IBM’s executive chairman), but the spin-off is the capstone of a multi-year effort to apply some kind of focus to the company’s sprawling business model.

The new spin-off doesn’t have a formal name yet and is referred to as “NewCo” in IBM’s marketing and investor relations material. Under the spin-off plan, the press release claims IBM “will focus on its open hybrid cloud platform, which represents a $1 trillion market opportunity,” while NewCo “will immediately be the world’s leading managed infrastructure services provider.” (This is because NewCo will start life owning the entirety of IBM Global Technology Services’ existing managed infrastructure clients, which means about 4,600 accounts, including about 75 percent of the Fortune 100.)

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  1. International Business Machines Corporations, or IBM, is an American information technologies company that serves clients in 170 countries. They are widely known for their Cloud platforms and their cognitive solutions and consulting capabilities. When a large company, such as IBM, announces a divestment, it is a huge deal. It is no small announcement that a corporation whose yearly revenues range in the tens of billions of dollars plans to separate part of their company. This new company, currently referred to as NewCo, for the time being, will be taking care of IBM’s managed infrastructure services while IBM focuses on its cloud computing and AI technologies.

    A divestment is the opposite of an investment. Instead of pouring money into new businesses and subsidies, IBM is taking part of their already established business and sell it off to a new company. Divestments are nothing new in the history of IBM, however, as stated in the ArsTechnica article. As technology continues to be innovated and improved upon, IBM divests their lower-margin lines of business into new companies while maintaining the higher-margin business ventures. By doing this, IBM has been able to make increasingly higher yearly revenues by having their companies focus on specific business aptitudes while leaving others to different companies. Once divested, these smaller companies will focus on lower-margin business ventures and work solely on these to increase their revenues. As a college student, it is easier to get high grades when taking fewer classes than it is to get high grades when taking several classes. This is similar to businesses as well. If a business gets too overwhelmed with many business ventures, its total revenues (or grades, in comparison) will not be as high as they could be. Divesting is a smart business practice, especially when it comes to a huge company like IBM.

    By divesting into NewCo, IBM is expanding its potential for success in the market. NewCo will not be starting from scratch, but instead is absorbing an entire department of IBM. This allows NewCo to have a huge advantage over other businesses in the same market. As NewCo launches, it will have thousands of high-profile accounts previously under IBM’s name. As the infrastructure management field begins to die down because of technological automation and the like, NewCo will cash-out in the time it has left in comparison to other companies in the same market. IBM has nothing to lose by announcing this venture, but a whole lot to gain. I’m excited to see how this plays out in the future success of IBM. From its stock values to future business ventures, I know that I will keenly be watching IBM’s maneuvers as they continue to dominate their markets.

  2. IBM, or International Business Machines Corporation, has been one of the best business solutions leaders. The company has focused its goals on creating the best machines for businesses. IBM was found in 1911 and they started their business creating machinery for sale and lease. Then, the company has focused its core activities on processing a big amount of data for important clients as the US government until they have created the first computers and the first kind of credit card that was already using the magnetic stripe. IBM is known also for creating the first artificial intelligence as computer. As one of the thirtieth most successful companies, IBM has been adopting its business in order to create more values and more profit. As it is shown in this article, IBM had decided to splite the company to achieve two goals which are: creating a hybrid cloud platform and a managed infrastructure service provider. IBM has understood that business’ world is focusing more on the cloud platforms as Apple, Google and Microsoft have done in the past years, so they will try to beat the competition with this company scission. NewCo, which is the other company that come from the scission, will focus on providing services to the businesses, and IBM’s CEO assures that NewCo would be the world’s leading company on providing these services. IBM has chosen a new branding strategy which is defined as multibrand strategy. This strategy is characterized as the creation of two different products represented by the creation of another brand which is always related to the pre-existing brand. If NewCo will grow in the future and they will be successful, it will add more brand values to IBM which will get a higher profit from this strategy. In my opinion, IBM and the new company had chosen the best strategy in order to give a new incentive to the company to grow and to became bigger, in fact, the biggest companies in the world have already created other brands and companies that are related to the first one to enhance the first company’s values and profits.

  3. IBM has been a large well known company ever since the beginning of mainstream computers has existed. The existence of IBM has been impressive and exciting to watch. Even though their name has not been the most well known for a little while now, they still are an extremely strong company who still holds its own in the electronic market. I was extremely interested to hear about this seperation because I think it will be interesting for a large company like IBM to split into two. IBM and its management have been making smart moves in regard to divestments for a long time now. Their most known for their divestment in the PC.

    This kind of company split seems like a smart company decision. Their new company will focus on new open hybrid cloud platforms which is extremely sought after in todays market. The market that they are trying to impact is a $1 billion market which creates a lot of potential for IBM and their new business. Another smart idea is IBM making their new company own IBM’s global technology services. This way their new company will already be the largest in the market.

    According to the article they are splitting the lower-margin lines of the company which could also be a very smart decision. This new company could gain its success and make IBM and even more powerful company with two strong companies in two different markets. This seems like a smart move by IBM considering that the low-margin portion of the company is shrinking and in the end would probably cause more harm to IBM. Not only could this move by IBM expand this end of their company, it could help IBM develop into a stronger more successful company. Overall I think that this decision will lead to more success from IBM. Hopefully the success of this company could help the economy recover after being down for so long.

  4. IBM is a well-known information technologies company and a leader in business solutions. When thinking of the company today what might come to one’s mind may be IBM Watson. Watson is a question answering computer system that is used as an automotive assistant and aiding in safer engineering. Along with Watson, IBM is well known for their Cloud services and mainstream platforms. This company has been around for a long time and they have decided that it is time for a spin-off. IBM will be taking its lower-margin lines of business and refocusing them on higher-margin cloud services. This will end up being a great business decision for IBM and greatly benefit the business. By taking the lower-margin lines of business and refocusing them they will be able to have a head start in a very promising market. NewCo has $19 billion in revenue and will hit the market immediately as the infrastructure service provider leader because they will be given the entirety of IBM existing clients. Starting out as the leader in a market with the potential to reach $1 Trillion. Refocusing the lower lines of business onto this market can prove to be very profitable for IBM and NewCo, while also cutting the threat of the lower lines business failing and losing the company money. They will be the leading company in the highly sought-after hybrid-cloud services and will end up having an advantage on all other competitors in the market. This spin-off was quite interesting to read about and I believe that it will be a great business decision for the company.

  5. All should gain the knowledge of what IBM has done in its lifetime, including their affiliation and success with NASA. They have taken it upon themselves to show other the way into the future, especially pertaining to computers and artificial intelligence. The news of the company split is a great idea that will potentially allow them to propel even further into the future, beyond where they would be without splitting. The way they explain it, as per the article by Lee Hutchinson, there will be six major facets to focus on, three for each company.
    IBM will continue to expand and adapt to the ever-changing world of electronics as they innovate, transform, and grow their products and functionality. The new company on the other hand, will focus on what has already been implemented in throughout the world, except they will stay behind to manage and improve the infrastructure services IBM currently provides. My thoughts are, they want to continue being the cutting-edge company that delivers brand new products and enhancements, all while maintaining their current assets and services—what better way to do that than to create a second company that can allow for the duality of focus.
    Any legal aspects involved will most likely be as simple as possible. I say this because the company is not splitting due to disagreement or feud and they are not going out of business or being bought. IBM wants to separate its focuses to deliver great things to the world, so there should not be any issue in doing so as the two companies will keep a healthy relationship intact. This is a great opportunity for a long awaited increase in value.

  6. Focusing on cloud-based services and AI moving forward is definitely a very important move for IBM. The future is AI and by divesting their infrastructure services they are clearing up more man-power for work towards AI and cloud services. The industry is moving away from physical technology infrastructure and services and shifting more and more towards virtual and cloud based offerings. A company as large as IBM may also look towards divesting their businesses for legal reasons, as they are one of the biggest technology companies to date. If their services were to become too great they may have one day become a monopoly, so earlier divestment of their services is strategically appropriate. The great leaders at IBM will continue to innovate and design while the amazing infrastructure that has already been laid out will continue to run smoothly without interference between the two. It is an incredible decision and no doubt the optimal decision after much deliberation by IBM officials analyses.

  7. The company IBM has decided to split its company into two separate companies. IBM will remain as one of the companies and they will focus on “technology and platform innovation, digital transformations, and will have significant growth opportunities.” The new company will be called “NewCo” and they will focus on “IT infrastructure modernization, service delivery excellence, and operational efficiency and cash flow generation.” I think it is a good idea to split the two companies because both can focus on their certain tasks to help benefit both overall. With the split, IBM will now be able to focus on its open hybrid cloud platform that has a market opportunity of 1 trillion dollars. If that number is correct, then IBM is very smart for focusing on that because that is so much money. NewCo has lots of opportunity to be successful because they “will immediately be the world’s leading managed infrastructure services provider.” This will happen because “NewCo will start life owning the entirety of IBM Global Technology Services’ existing managed infrastructure clients, which means about 4,600 accounts, including about 75 percent of the Fortune 100.” Moshe Katri feels like IBM is being very smart in this situation, “IBM is essentially getting rid of a shrinking, low-margin operation given the cannibalizing impact of automation and cloud, masking stronger growth for the rest of the operation.” Growth is something every company wants and with this plan IBM will be able to significantly grow and focus on things they maybe were not able to do before. Investors also agree that this is a smart plan because IBM’s stock has risen 7 percent since the announcement. I feel like NewCo has so much opportunity. With the guidance from people at IBM, there is no reason why NewCo cannot be just as successful. I was honestly surprised when I read the title and thought the company was splitting because of some sort of disagreement within the company. But the company is just doing a smart and strategic business move. This is very exciting for someone my age who is a business major. It is exciting because there will tons of new and exciting job opportunities in both companies. As we evolve as a society so does the workplace. Our generation is super smart and very able to take jobs that maybe some older people would not be able to do. I am excited to continue to follow these companies and see what is next for them.

  8. IBM developing a spinoff plan for a company called NewCo for an $1 trillion market opportunity claiming it will immediately be the world’s leading managed infrastructure services provider is a big move. Although it is a big move it is also a very strategic move that will cause a significant shift within the IBM company. International Business Machines Corporation (IBM) is an American based cloud platform and cognitive solutions multinational technology and consulting company headquartered in Armonk, New York, with more than 350,000 employees serving clients in 170 countries. Before their announcement of their split, IBM provided the world with computer hardware, software, and middleware. They specialized in areas like providing mainframe computers and researching and developing nanotechnology. Their brand has been viewed as valuable for over 100 years, providing exclusive technologies to various partners like the Masters Tournaments, they developed the first live streaming app for the iPhone, as well as, the first ever 4k Ultra High Definition feed in the United States for a major event. This demonstrates the potential of the split, and IBM’s confidence in what they can do with this spinoff, and how they can improve society with the developments they have under the microscope. The planned split is also growing more and more attractive to investors for IBM’s stock. The spinoff is verified by IBM that it will gain its own attraction because NewCo’s focus will be “operational efficiency and cash flow generation.” As a result, IBM says, “I expect NewCo to pay a high dividend and have an extremely elevated dividend yield, attracting many income investors.”

  9. IBM, or, International Business Machines Corporation, is a well-known public company around the world. It is a technology and consulting company with consumers and customers in over 170 countries around the world. This company basically works to push intelligence in business and technology to the next level. It is a super successful company and I have heard of it many times before reading this article. To find out that it may split by the end of 2021 amazes me. I am curious to see what the company will be able to accomplish. A press release talking about the spinoff of IBM claims that, “will focus on its open hybrid cloud platform, which represents a 1 Trillion dollar market opportunity” and “NewCo will immediately be the world’s leading managed infrastructure services provider” This simply amazes me. The fact the “small spinoff” of IBM is already the biggest infrastructure service provider in America. This brand-new company that they are calling NewCo, since it does not yet have a name, I believe will bring a lot of change to the way the infrastructure to the United States is laid out. When a company divides into another like this it is described as a Divestment. A divestment is the process of purposefully splitting into a different company other than the main company because you can spread out profits and agendas. IBM is famous for making Divestment companies to help bring life to another branch of business. They have done this in the past and will continue to do this in the future. In the 1990’s they divested a company to work on networking and the internet. Then in the early 2000’s they divested to work on Personal Computers. Finally, this is the next level of the divestment they will take. From an investment standpoint, this new IBM company would be a great investment saying that almost every time this company divests, the new branch company blows up and is a great new addition to the family business that is IBM. When I say the new company will be focused on infrastructure, they will also be focused on cloud-based services which is big currently. Everything revolves around technology and I would love to see another company take a step into making our future brighter in this aspect. Overall, I think it would be a great idea for IBM to Divest and split into another company.

  10. After reading this article about IBM, a company I was familiar with but didn’t know much about, I was highly impressed with both the future marketing decisions they have began to make and the great success they have already found. Since it’s founding in 1911, IBM has served as a forefront influencer and leading company in the industry of business solutions and technological consulting. As a company that has found such success in the past, It’s not a surprise to see the company now looking to gain another head start on the competition by jumping further into the realm of cloud-based services and other modernized infrastructure. This new branch NewCo will work closely with IBM moving forward and is seen as a potential trillion dollar market opportunity by current CEO Arvind Krishna. Branching off NewCo as it’s own separate company will better allow those working on the project to focus more directly on their goals while still having the financial support of a parent company if need be. Between the upside of the market they are looking to enter, the working relationship between the two companies set to take place, and the past success IBM has had, this seems to be a safe and smart business decision for the company.

  11. Long term plans to streamline IBM’s business will become reality when they split into two companies in the end of 2021. This spinoff will allow IBM to focus on its sprawling business model. Split into two companies, IBM will be compromised of one that is a hybrid cloud platform and an AI company while the second will be managed infrastructure services. These two market leading companies will share focused strategies and will benefit from their string strategic relationship. This strategic divestment and significant shift were acknowledged by IBM’s CEO Arvind Krishna who stated that this “NewCo” has yet to be named. IBM “will focus on its open hybrid cloud platform, which represents a one trillion market opportunity.” The focus of IBM’s more profitable company will include technology and platform innovation, digital transformations, and significant growth opportunities. Moreover, IBM’s scope for this company will be cloud and cognitive software, global business services, systems and global financing segments, and global technology service segments. Likewise, the “NewCO” strategic focus will include modernization of its IT infrastructure, excellence in service delivery, and operational efficiency with cash flow generation. In addition, the scope will include the managed infrastructure services business of global technology services segment. The revenue stated through June 30th, 2020 for IBM was $59 billion compared to $19 billion for the “NewCO” for the same time period. Furthermore, “NewCo” will own the entirety of IBM’s global technology services which makes them the number one managed infrastructure company. Going into this as a new company, they will inherit the existing managed infrastructure clients with 4,600 clients in 115 countries. The announcement of the 109-year-old company’s plans to split has IBM’s stock up seven percent. Also, this excitement has caused an uproar amongst investors who envision the impact of automation and cloud lead to stronger growth for the rest of the operation with more profit potential.

  12. IBM has announced that they will split off a section of their company into “NewCo” by the end of 2021. The divestment allows IBM to unload what they feel are lower margin businesses from their books and divestments are not a new strategy for IBM, as they have been doing them for decades. IBM has a history of divesting shrinking markets to focus on the future and higher margin goods and services. In he 90s and 2000s IBM divested networking and PCs because they saw these markets shrinking and weighing down their business. Just because IBM has experience in divesting, that does not mean that this is not a significant event, IBM is divesting $19 billion dollars’ worth of revenue to NewCo which will make the new company the immediate leader in what IMB claims is a trillion dollar market for cloud platforms with all of the rights to IBM Global Technology Services’ existing managed infrastructure clients. This divestment opens the door for IBM to narrow their focus and while their revenue may fall, their net income will rise by dumping a business that is outdated. This is a smart practice that has worked out for IBM recently and it is part of the reason that the 109 year old company is still on the forefront of the Technology industry. Being able to adapt to an ever changing world and not wating to be left behind before changing their business model has been incredibly successful for IBM. Being the change instead of being wiped away by it has kept IBM one of the worlds most powerful companies.
    The move was met with excitement for IBM as it is seen as a way for IBM to get a shrinking market operation off of their books, so it does not weigh down their higher market ventures. News of the split had IMB shares trading 7% higher on the day of the release. This venture benefits both IMB and NewCo as IBM is divesting a part of their business no longer on the cutting edge and NewCo from its conception will be an industry leader because of the IBM connections that they will be coming out of the gate with.
    The move was met with excitement for IBM as it is seen as a way for IBM to get a shrinking market operation off of their books, so it does not weigh down their higher market ventures. News of the split had IMB shares trading 7% higher on the day of the release. This venture benefits both IMB and NewCo as IBM is divesting a part of their business no longer on the cutting edge and NewCo from its conception will be an industry leader because of the IBM connections that they will be coming out of the gate with.

  13. IBM has over three-hundred-and-fifty thousand active employees worldwide. Hence, it is a large-scale company dating back to New York during 1911. After a century of successfully providing services in the cloud and technological industry, the publicly traded company made the decision to split portions of itself into an entirely new entity; that is, “NewCo,” as it is currently referred to. IBM will continue its focus on cloud services. Essentially, IBM will run the technology and platform innovation, digital transformations, and other significant growth opportunities portion. Meanwhile, NewCo shifts its efforts to IT infrastructure modernization, service delivery excellence, and operational efficiency and cash flow generation. What does this mean for investors, though? That might be the question many are wondering.
    No. The short answer is no. The long answer is ‘although this presents a possibility or risky move, it still has not gained enough traction to make intelligent investors feel secure putting their cash in the pockets of IBM.’ Take, for example, the renowned investor Warren Buffett who recently dipped out from investing in IBM. For those who do not know who Mr. Buffett is, he retains an ever-fluctuating net worth currently sitting at a staggering $113 billion. Yes, billion dollars. Buffett is the chairman and CEO of Berkshire Hathaway, a holding conglomerate with its BRK-A stock around $320,000 per share, as of October of 2020. Furthermore, he is, by far, considered to be among the best investors in our time. Thus, when Buffett lost a seven-year long battle dealing with IBM, it is advised for most individual investors with much less time and consideration in their hands to stay clear of the stock, as well.
    I am eighteen-years-old, and will soon turn nineteen. For the last several months, I have spent many hours studying investing practices and general tips to keep in mind when dealing with the stock market. After much time and consideration put into investing, I would confidently say that I do not know a sufficient amount of information deemed sufficient to be investing in individual stocks, nor do I have the non-essential funds to put into them. Instead, due to my lack of knowledge and inexperience in the field, I would much rather take part in index funds which track the S&P 500 Index. The Standard and Poor, or S&P 500 is a fund which values a plethora of some of the largest 500 publicly traded companies within the United States. Here, I adhere to a method called dollar-cost averaging (DCA), which is a practice of consistently investing a set amount (e.g. a percentage based off of my income) of money in the stock market at set intervals of time. For me, I invest money on a weekly basis within a Roth IRA. An IRA, or Individual Retirement Account, is self-explanatory, but the ‘Roth’ means that I am investing post-tax dollars. In other words, since any growth of your assets in the stock market is considered income, you will be taxed on that margin whenever, if you do, sell the stock. The ‘Roth’ portion of the IRA just means that the money I am putting in initially is already considered to be taxed, so when I am of the required age to pull the funds out (i.e. when I am 59.5-years-old), the wealth accumulated since I first starting contributing will have already been taxed, thus the money I pull out is completely mine. I advise my peers with similar levels of experience in investing, or lack thereof, to take advantage of this, as well. Rather than investing in IBM and taking a wild guess as to whether it grows or not, watch your money sprout over time with the market. In conclusion, stay away from things you are not confident in. A start-up company, even when funded by a large corporation, is still just that. Watch its performance before making a decision.

  14. The decision for IBM to divest itself into two companies makes sense in the context of its move toward Cloud Computing services. By separating its businesses into two distinct segments (Cloud Computing & AI and Tech Infrastructure Services), IBM stands to make its businesses more profitable and more efficient in the long run. Cloud Computing is a relatively new field (though IBM is late to bat for a tech company), which requires heavy investment into R&D and human capital. By separating its relatively less innovative business from its core, IBM can more easily focus on investing in its future.

    On the legal front, it may make sense for IBM to transform its business in the face of a changing political climate. Regardless of political party, Americans are growing hostile towards corporations and wealthy billionaires, especially considering the fact that billionaires are posting record wealth levels in the midst of an ongoing pandemic. IBM’s position is not helped by the fact that Amazon is continuing to expand into new markets, such as web services, fresh food, media content, audiobooks, and so-on. By divesting its business now, IBM reduces the risk of facing the scrutiny of a trust-busting government in the future.

  15. IBM, the leading American computer manufacturer, was incorporated in 1911 as the Computing-Tabulating-Recording Company in a consolidation of three smaller companies that made punch-card tabulators and other office products. Since 2000, IBM has placed one of its supercomputers consistently at or near the top of the industry’s list of most powerful machines. The company now holds more than 40,000 active patents, which is one the most any company possess worldwide. Now the company has decided to delegate some of its lower margin products into a new company called NewCo. This new company will be focusing on modernizing IT infrastructure for its clients. IBM will now focus on a hybrid cloud format as well as developing AI technology. By taking 75% of the fortune 100, NewCo will already have close to 5,000 clients within the industry which is a big advantage for a company beginning to go into a new market. IBM is smart to create a new company within itself to gain more market share and to get into new markets. A 1-billion-dollar market is what the company is venturing into which creates more opportunities later on to do even more spin offs into other industries. This will lead to the company gaining more revenue most likely, which will make investors happy.

  16. IBM has been a technological behemoth for the entirety of the age of modern technology. Part of the way that they can stay fresh and ensure an innovative design is through divesting old parts of their business model. Cloud and AI are the future, and I will be excited to see what IBM puts out. They don’t lack competition as they used to pre-apple and Microsoft, Amazon’s AWS cloud, Microsoft Azure, Google’s cloud platform, are all significant competitors in the cloud space. In the A. I realm is all about data and who has the most of it. Perhaps IBM’s age size can give them a unique edge over newer companies in the tech realm.
    The NewCo is going to be a powerful, however dying company. Their focus on operational efficiency stood out to me as saying they will stay lean and get as much money as possible before Cloud takes over. NewCo is not the place for innovation. IBM, on the other hand, sites “growth opportunities” and “digital transformations.” The relationship mentioned between the two companies will likely take the form of NewCo installing any cloud technologies their customers need and transitioning to a could maintenance company. This could all be some financial trickery if they simply wanted to make IBM a more attractive offer on the market.
    Some people do not know what a “cloud” is, so it could use some explaining. Part of the reason is that it is so broad. The Cloud consists of an interconnected string of supercomputers that all share power and information. Individuals or companies can connect to these systems and use their power with their own data or software. This enables the speed of a supercomputer with power that can scale to the consumer’s moment-by-moment needs. It is an economy of scale that removes the burden of IT maintenance from individual companies. Some things in the way of Cloud is internet speed and infrastructure, but it is important to note the Cloud is already here. Gmail, Microsoft Outlook, Dropbox, OneDrive, and more all function as a cloud. Artificial intelligence, on the other hand, is a little farther away. A.I uses massive amounts of data to train computers to either think like people or come up with the most efficient solution to a problem. Because of the power of A.I we are looking for products from self-driving cars to cancer-detecting machines and more. A.I need time to develop, but it will fundamentally change the way we live our lives. A.I and the Cloud go well together because of the computing capabilities that Cloud enables and the fact that companies will need both in an integrated system to compete in the future.

  17. I believe that the splitting of IBM will be a very beneficial move by the company. It is a widely known fact that as companies grow bigger and bigger, they become less and less efficient. this is because information must pass through a much larger number of people for decisions to be made. On top of that, there are many more people than need to have to make strategic business decisions for the company. This causes the process to become much longer. This also develops a political like atmosphere in the workplace, the larger the company becomes. Which bogs down the Corporation and makes it more expensive to complete tasks than it would be if the company was smaller.

    The splitting of IBM will allow each of these separate companies to be more efficient in the tasks and goals that they set to complete. IBM will be able to put 100% of their efforts into their hybrid cloud platforms and the furtherment of their AI development. And NewCo will be able to put 100% effort into Managing infrastructure services for other companies. In economics, we learn that when companies are allowed to specialize in a given task, it allows them to be much more efficient than if that company decided to multiple tasks at the same time. This is seen on a bigger scale with countries like some countries, for example, the United States is very good at inventing and creating new ways of doing things. Other countries such as China are very good at the process of manufacturing goods. When both the United States and China work together it works in everyone’s favor because the United States allowed to specialize in what they do becoming more efficient and China is allowed to specialize in what they do becoming even more efficient. thus, both sides will be better off than they were before. The splitting of IBM will allow for exactly this to happen. Both companies will be allowed to work together towards a combined goal but at the same time specialized in what they were good at.

    As mentioned in the first paragraph this also allows both companies to become more efficient because they will have fewer employees. When a company has fewer employees, they are not bound to as much paperwork and Corporate inefficiencies as larger companies are. On top of this, the splitting of the company will help it from not being broken up by the United States government. When companies become too large and gain almost as much status as a monopoly would have, the government often tries to break them up so that its monopoly does not form. IBM is an extremely large company that does large amounts of business over all the sectors that they are in. They are also known to eat up market share in the industries that they present themselves in. The more market share they eat up the more likely it will be for the government is split them apart.

    The splitting of IBM will allow each of these separate companies to be more efficient in the tasks and goals that they have set. IBM will be able to put 100% of their efforts into their hybrid cloud platform and AI development. And NewCo will be able to put 100% effort into Managing infrastructure services for other companies. In economics, we learn That when companies are allowed to specialize in a given task it allows them to be much more efficient than if that company decided to both tasks at the same time. this is seen on a bigger scale with countries as some countries for example the United States are very good at inventing and creating new ways of doing things. Other countries such as China are very good at the process of manufacturing goods. When both the United States and China work together it works in everyone’s favor because the United States allowed to specialize in what they do becoming more efficient and China is allowed to specialize in what they do becoming even more efficient. thus, both sides will be better off than they were before. The splitting of IBM will allow for exactly this to happen. Both companies will be allowed to work together towards a combined goal but at the same time specialized in what they were good at.

    As mentioned in the first paragraph this also allows both companies to become more efficient because they will have fewer employees. When a company has fewer employees, they aren’t bound to as much paperwork and Corporate inefficiencies as larger companies are. On top of this, the splitting of the company will help it from not being broken up by the United States government. When companies become too large and gain almost as much status as a monopoly would have, the government often tries to break them up so that its monopoly does not form. IBM is an extremely large company that does large amounts of business over all the sectors that they are in. They are also known to eat up market share in the industries that they present themselves in. The more market share they eat up the more likely it will be for the government is split them apart.

  18. Splitting the IBM would be a very helpful move to the company.However you shouldn’t really fix anything that’s not broken, for example there can be changes made to the company, but it doesn’t mean to change the whole thing and maybe not feel the look of the company after a few changes. Also but if they make a good change and it stays the way it was changed, maybe some salaries can be moved up and maybe there can be longer stays for workers and the company may last a lifetime which is the dream of every company and not to go bankrupt. Every company wants to improve its machines and its goods, which is good, and I believe IBM will do just that and make sure that they put their money to good use to improve their company and theres always room for improvement. With the technology improving and IBM wanting to improve their tools and technology, I believe they will do just that because of how much money they have and how they will just get right to work and how it will improve their company drastically and if they keep getting money, they will keep improving their business, and it will be there for a very very long time, and that’s all you can ask for.

  19. IBM is also known as International Business Machines Corporation has decided to split into two companies by the end of 2021. IBM will still be a company that solely focuses on technology and platform innovation, as well as digital transformations. The company that will be formed out of this split will be called NewCo. NewCo will be strictly focused on IT infrastructure modernization and the delivery of excellent service. IBM must have thought about this decision for a long time and this seems to be in their best interest. Analysts are predicting for NewCo to have a $1 trillion dollar market opportunity, and since IBM will be there to show them the ropes in the industry, I believe they can do this very well. NewCo also has a headstart, since they will be absorbing the 4,600 clients in 115 different countries. The idea of splitting has actually benefitted IBM since investors are excited to invest and believe in what IBM is trying to accomplish. IBM currently employs roughly 350,000, and by splitting into two companies, will reduce the number of employees. More employees lead to more paperwork and inefficiencies. I believe IBM started to realize that they were becoming a monopoly, and were expecting the government to intervene. This split will prevent the US government from intervening. Personally, I think it makes sense that IBM chose themselves to split before they were forced to by the government. This would give IBM a bad name and its reputation would crumble.

  20. IBM recently announced that it will split into two companies by the end of 2021. The purpose of this split is to give each of the companies an opportunity to focus in on a specific area of IBM’s mammoth business. After commenting on a post about how Apple, Google, Facebook, and Amazon have come under fire for their growth and size, I think it’s fascinating that IBM is choosing to make this move. While other companies are being threatened by the House because of their monopoly and the idea of forcing them to break into smaller groups is tossed around, IBM has done it simply because they felt it was best for their business.

    I admire IBM for this move and think that it will benefit them in the long run. Stockholders seem to agree since on the day of the announcement IBM stock was up 7%. This move will help a huge company make a more concerted effort in different parts of its business model and will likely lead to further success.

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