Posters here have mentioned that IBM spun out Kyndryl with the intention of buying another IT infrastructure buisness with a better structured workforce (in low cost labor markets). Last Thursday IBM released a memo in which they mention that they rehired Alex Stern making him SVP of strategy, mergers and aquasitions. Also last Thursday DXC hired 2 new board members with backgrounds In anti-trust politics. Based off of this it sounds to like IBM is planning on acquiring something from DXC. Curious if there are any flags internally?
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IBM’s management exec’s have been saying for over a year that they are a SW and AI company with focus on Hybrid cloud, and Redhat modernization exploiting enterprise customers (yep mostly mainframe and large power installs). If the infrastructure that IBM is looking at focuses on that piece of the business, then yes IBM will be growing its existing infrastructure business. BUT and yes it’s a big but, IBM is also looking to offload every other piece of its non-core infrastructure business as IBM’s overhead (very high) and the product/services volume (very low) just can’t compete with commodity (high volume/low margin) suppliers. What will IBM do? They’ll partner with the commodity suppliers instead (a give to get) as that benefits both sides due to both sides getting opportunities at what they do best. It’s a GF type deal, but with far less risk for both sides.
Push is to SW agnostic of platform.
If done correctly an asset swap would benefit both companies by narrowing their go to market focus. I cannot see IBM entering back into GTS services given that under IBM GTS was losing 7% revenue per year.
@vqd+1kBrtcW4 OP here. Interesting, I've heard rumors here about DXC and IBM doing some sort of asset swap with the power & storage components and DXC's mainframe buisness. What do you think about that?
(Original post)
https://www.thelayoff.com/post/@3syu+1iwWVm7r
I'd be more inclined to believe that the reverse is true and that IBM would be looking to offload something to DXC