Managed services News
Kyndryl CEO Martin Schroeter: We Are Exiting The Influence Of IBM
Joseph F. Kovar
‘This is not a business that IBM really invested in. It chose not to. So we now have an opportunity to not only move into the ecosystem that matters, but also to invest in the business and create the kinds of offerings that our customers will invest in, but just as important, how they think about us,’ says Kyndryl CEO Martin Schroeter.
World’s Largest Startup Looking To Make Its Own Way
When Kyndryl, the former managed infrastructure business of IBM was spun out of Big Blue in November of 2021, it immediately became the world’s largest IT startup, a global solution provider with about 90,000 employees and about $19 billion in revenue. The spin-out itself was smooth, with Kyndryl immediately becoming a public company and looking for ways to grow its business.
But the company still carries a lot of baggage from its former role as part of IBM. Kyndryl CEO Martin Schroeter, in an exclusive meeting with CRN, said that the company’s dependence on IBM in the past means that its immediate future is tied to the legacy revenue and technology of its former corporate parent. For instance, Schroeter said, IBM was focused on the IBM Cloud and Red Hat, which meant that Kyndryl, to meet clients’ needs, has had to forge its own relationships with the likes of Microsoft Azure, Amazon Web Services, Google Cloud Platform and VMware.
Kyndryl is also responding by building new skills in non-IBM technology, including cloud, AI and security, Schroeter said.
“Each of the relationships that we’ve signed and are building with our partners like Microsoft, AWS and Google has a co-investment in our skills,” he said. “So our money plus their money. In fact, Microsoft created something called Microsoft University for Kyndryl. Google created something called Google Academy for Kyndryl. So top-of-the-list for our investments are skills. Because that’s what our customers are looking for us to do to run their systems of record.”
Schroeter knows that Kyndryl has a lot of investment to make to succeed, given that IBM in the past under-invested in the managed infrastructure business which it saw as gradually declining.
“IBM didn’t want to invest in it,” he said. “I think their point of view was, without investment, it’ll never turn around, and therefore it’s always going to be 1 to 2 points of drag on IBM’s revenue growth.”
Kyndryl has a lot going for it because of the skills it built and the customers it signed as part of IBM. But it knows it needs to move quickly to prove it can succeed as an independent global solution provider. For a look at what the company has planned, read on.