Corporations expect to use the cloud platforms from a growing number of vendors by 2023 but only 29% of businesses have a holistic multi-cloud management strategy.
“This is the reason why the opportunity here is significant for the company,” Patel said.
IBM’s CEO Arvind Krishna, who will take over as chairman on January 1 following Ginni Rometty’s retirement, had said that after getting regulatory approvals, the new structure will likely come into force by the second half of next year, including in India.
Krishna had also said that the Covid-19 pandemic had accelerated clients’ journey towards Cloud and AI.
Talking about the priorities for 2021, Patel said IBM will redouble its bets on hybrid cloud by strengthening existing hybrid cloud capabilities, focussing on NewCo (the new arm of IBM) and Red Hat acquisitions.
“In 2021, we will accelerate our investments to ensure we have the right capabilities needed to develop the next generation of infrastructure services with industry-leading reliability, service and efficiency. The spin-off will bring in focus and help us expand in India, aligned to India’s growth agenda,” said Patel.
‘Co-creation and Co-innovation’ will be the key along with ecosystems that will be important for both NewCo and IBM for future growth, he said.
The company recently said it would invest $1 billion to further develop its hybrid cloud ecosystem – including incentives for third-party software providers to build on the IBM open hybrid cloud platform.
Wipro, Infosys, TCS, Tech Mahindra and others already partner with IBM for this platform.
Shailesh Agarwal, VP – Strategy and Cloud Platform, IBM India said that the infrastructure services market is worth around $10 billion in the country but that it is a fragmented market.
Even as research suggests that IBM is a market leader with around 15% market share, the next player will have 6-7% market share, Agarwal said.
“This fragmentation provides a lot of opportunities for players with scale to grow,” he added.
IBM has already earned a sizable cloud business of $24 billion globally over the past 12 months, and it grew 25% in the previous quarter.
NewCo is expected to have 90,000 employees, and nearly one-third or one-fourth of the employees based in India will move to the new entity.
Patel, however, ruled any rightsizing when the restructuring is complete.