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IBM appoints CEO to run $19B managed services spin-off

IBM appoints CEO to run $19B managed services spin-off

Martin Schroeter assumes control of Managed Infrastructure Services division

Martin Schroeter (IBM)

Martin Schroeter (IBM)

Credit: IBM

IBM has appointed Martin Schroeter as CEO of NewCo, the multibillion-dollar managed services business expected to be officially spun-off by the end of 2021.

Effective 15 January, Schroeter is tasked with shaping the go-to-market strategy of Big Blue’s Managed Infrastructure Services division, which will focus on the management and modernisation of IT infrastructure across the world.

The new-look business houses approximately 90,000 employees with more than 4600 clients spanning 115 countries - including over 75 per cent of the Fortune 100 - and a backlog of $60 billion in orders, which is more than twice the scale of nearest competitors such as Accenture, Fujitsu and Huawei.

“Martin is a world-class leader and is uniquely qualified to drive the long-term success of the new, independent company,” said Arvind Krishna, chairman and CEO of IBM. "He has a deep understanding of the industry and has earned the trust of our clients and of the investor community.

“Martin has the strategic vision and business judgement to realise NewCo's enormous potential as the global leader in managed infrastructure services. He is an inspiring, results-driven executive and the right CEO to lead NewCo through the spin-off process and beyond.”

Schroeter previously served as IBM's senior vice president of Global Markets, holding responsibility for the vendor’s global sales, client relationships and geographic operations, before leaving the company in June 2020.

Prior to that he was CFO from 2014 to 2017 having also served as general manager of IBM Global Financing, where he managed a total asset base in excess of $37 billion. Earlier in his IBM tenure, Schroeter also served in numerous roles in Australia, Japan and the US.

“NewCo is a trusted partner to the world's most global enterprises with a team that has the best skills and experience in the industry," Schroeter added. "I look forward to developing a diverse ecosystem of partnerships and alliances, to continuing a deep relationship with IBM, and to the creation of market leading capabilities.”

As reported by sister publication Network World in October 2020, IBM doesn’t want any distractions on the road to becoming a prodigious hybrid cloud player, evident through eliminating one of those diversions in the form of the Managed Infrastructure Services unit of its Global Technology Services division.

Arvind Krishna - CEO of IBM who replaced Virginia Rometty in April 2020 - likened the move to Big Blue’s previous large divestitures such as its decision to get out of its networking business in the '90s and PCs in the 2000s to focus on bigger things. In this case that bigger thing is hybrid cloud computing.

“Hybrid cloud and AI are swiftly becoming the locus of commerce, transactions, and over time, of computing itself," Krishna stated at the time of the announcement. "Our decision is also the logical next step in our pursuit of the $1 trillion hybrid cloud opportunity.

“Today, services account for more than 60 per cent of our revenue. When NewCo becomes an independent company, our software and solutions portfolio will account for the majority of our revenue. This represents a significant shift in our business model.”


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