US-listed computer pioneer IBM will split off its IT infrastructure services unit, which is comprised of its managed infrastructure services, into a new company.
This leaves IBM as a hybrid cloud and artificial intelligence company with global business services focused on partnerships and the ecosystem.
Crucially, IBM’s two corporate venturing units under Angie Grimm and Pramila Mullan will stay with the core. This is important as without the infrastructure unit managed legacy platforms, a potential source of customers and revenue will go.
Corporate venturing as part of an ecosystem development platform makes sense but Arvind Krishna, new CEO at IBM since April, will have to commit as fully as Microsoft did in supporting Nagraj Kashyap as its head of the M12 corporate venturing unit to make it work.
The flip side of diversification and separation is consolidation. Here, tech companies, such as NEC and Twilio, are buying strategic targets.
NEC’s purchase of Switzerland-based Avaloq will add in a financial services division, to be run separately and including with Avaloq Ventures under Alexander Christen.
For Twilio, now a $45bn market capitalisation company after a 150% rise in its stock price this year alone, buying Alphabet’s corporate venturing unit GV-backed Segment for a reported $3.2bn helps it in customer data platform build out.
As venture capitalist Semil Shah said in his weekend blog: “API-driven businesses are not just viable, but tremendously efficient and value-accruing…. Twilio and Segment helped pave the way, and it will all come to a head when Stripe goes public….
“As Q4 [fourth quarter] unfolds, I wonder if we will see other public tech companies who have gone to the moon in 2020 — like Zoom or Peloton — leverage this newly found currency to make some strategic purchases.”
