IBM to Spin Off Legacy IT Business, Pegging Future on Cloud

(Bloomberg) — International Business Machines Corp. is spinning off a slower-growth business that manages corporate computer systems so it can focus on the boom in demand for cloud services and step up competition with Amazon.com Inc. and Microsoft Corp.

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The new unit, which is currently part of IBM’s global technology services division, handles day-to-day infrastructure service operations, like managing client data centers and traditional information-technology support for installing, repairing and operating equipment. It serves 4,600 clients and has an order backlog of $60 billion, according to a statement from IBM Thursday.

The shift essentially divides IBM into two, splitting its legacy IT-management services from its new hybrid-cloud computing and artificial intelligence unit, which the company hopes will return it to revenue growth — and relevancy. IBM said it aims to complete the transaction as a tax-free spinoff to IBM shareholders by the end of 2021.

The move is

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