IBM Has Spin Off Infrastructure Management to the New Company NewCo

One of the largest and oldest IT companies in the world, IBM continues to adapt quickly to the market, and one of them is the separation of infrastructure management into a new company NewCo, said to ICTbusiness.biz Davor Malojčić, General Manager, Global Technology Services, IBM Central and Eastern Europe.

He points out that for clients it means high-value services quality - by being more focused on what we do best and being more agile in delivering those services to our clients. While larger, complex companies spread their investments and prioritise over multiple areas which is logical, we will now invest and grow in IT technology services, Malojčić point out.

Many trends and reports show that the COVID-19 pandemic highlighted the need for infrastructure able to support the distributed enterprise's operations while working from anywhere. We see the shift to cloud-based infrastructure and services, edge computing become corporate mainstream, cybersecurity attacks are on the rise. In which way will those changes and trends influence infrastructure services in 2021 and beyond?

I would say in terms of the COVID crisis a lot of businesses did much better than expected - especially because of IT. Companies moved thousands of workers to work from remote locations, some businesses have increased online trade, public institutions started corresponding more with citizens via electronic channels. Digital transformation in many companies has been accelerated.

With that, IT became even more essential - and businesses became more exposed if something goes wrong with their IT.

Therefore, I expect that demand for cloud and especially for hybrid-cloud solutions that embed infrastructure scalability, high IT security standards and robustness will continue to grow. On top of that, requirements for application portability across different platforms, containerization and virtualisation will add to IT infrastructure complexity that will have to be properly designed, implemented and managed.

If you look at IDC reports, cloud is on the rise and IDC projects 20% growth this year in Cloud Managed Services. Companies will continue looking for partners that can provide not only technology, but a “guiding hand“ in their journey to cloud or digital transformation.
We hear a lot of conversation about companies transforming their businesses into cognitive enterprise. What cognitive enterprise means in terms of services and infrastructure? Can you mention some real-life examples how IBM helped companies on their cognitive enterprise journey?

We have many examples over various industries where we have helped our clients to implement cognitive solutions. I always like to mention examples from our neighbourhood as I truly believe that the CEE region is a place from where many innovative cognitive transformation projects are coming.

For example, the Polish Ministry of Health, with support from IBM, created and deployed in just four days a BOT solution for COVID-19 information for Polish citizens on common questions such as symptoms and recommended procedures to follow in case of infection. Right now, it provides around 150,000 conversations a day in categories such as medical, mobility, social and legal. It is the first touch point of the national health care information system with Polish citizens.

Another example is ECONT, one of the leading logistics services providers in Bulgaria with presence in Romania and Greece, which implemented a new (centralized) video management system to the IBM public cloud to improve the customer experience for the cargo, postal and courier services it delivers to its e-commerce and individual customers to optimize its back-office processes. ECONT can now enable rapid video review and search, real-time alerting, and quantitative video insights from a centralized dashboard. Leveraging data from video footage allows ECONT to quickly identify and respond to potential risks or opportunities and ensure its quality standards.

We just signed a new five-year agreement with Luminor bank, the third-largest bank in the Baltic region, under which IBM Services will help accelerate Luminor’s digital transformation. With IBM, Luminor aims to accelerate the adoption of next-generation technology and digital-driven solutions in a hybrid cloud environment to enable better outcomes across business processes, faster application deployments and bring agility with enhanced security and resilience.

It's evident that more and more companies are turning to AI when it comes to increasing productivity and automation, innovation and personalization. Tell us how will AI change the world of infrastructure and operations?

It is already changing it, for the better. In the same way that cognitive AI solutions are used to transform business processes, trying to learn something from large amounts of data and then apply it to for the business benefit, there are multiple innovative solutions based on AI that help us in managing IT systems.

First I would mention AIOps (Artificial Intelligence for IT Operations), which uses machine learning to collect and aggregate huge volumes of data generated by IT infrastructure components, then intelligently identifies significant events and patterns related to system performance, diagnoses root causes, and reports them to IT for instant response, usually automating resolution without human intervention.

There are also other solutions that help us automate and optimise infrastructure management, like MCMP (Multi Cloud Management Platform), Security Threat Intelligence, Resiliency Orchestration etc.

To conclude, innovative digital transformation trends in business like big data, automation or AI require implementation of similar solutions in IT infrastructure management. Both will continue to grow and pull each other forward.
IBM announced that the Independent Managed Infrastructure Services business will spin out from IBM and will act as an independent company currently called NewCo. IBM's growth strategy is to put greater focus on hybrid cloud and AI while NewCo will be committed to infrastructure services for its clients. What this means for your clients, is this separation of services within your portfolio?

For our clients it means high-value services quality - by being more focused on what we do best and being more agile in delivering those services to our clients. While larger, complex companies spread their investments and prioritise over multiple areas which is logical, we will now invest and grow in IT technology services.

On top of that, NewCo will have more freedom to partner with different leading technology providers, offering a wider set of solutions that might be a better fit for our clients.

NewCo will be the world leader in managing complex and critical infrastructure from day one of the spin-off and will continue helping our clients digitize and modernize their infrastructure and keep their customers satisfied, all without jeopardizing their data (keeping it safe, and secure, and available).

What is NewCo’s potential being independent company and how it will help companies across the industries aggregate, integrate, build and maintain a scalable business. In which sectors do you see the biggest potential?

As an independent company NewCo will have the potential of a start-up, but a start-up that has 4600 customers worldwide, around 19B US$ of annual revenue and a large number of highly skilled IT professionals. Nothing happens without IT infrastructure — from making airline reservations, to executing online banking transactions — so NewCo people and services are tasked with making sure these crucial operations are running seamlessly across industries in both the public and private sectors.

Also, as I have already mentioned, NewCo will be able to extend partnerships across the spectrum of technology providers but at the same time “IBM DNA“ will make it natural to be the leading partner for IBM solutions. At NewCo we will continue investing in cloud, security, blockchain and AI, with a focus on infrastructure and IT technology.

IBM has just announced key members of the executive team to lead "NewCo," ? How they will lead the process of separation in 2021 and what’s the strategy for 2021 during the transition phase? How will the separation of the Managed Infrastructure Services impact the business in Croatia and in the SEE or CEE region?

In terms of client engagement, clients’ key points of contact will remain the same, and the quality of services and delivery they receive will be unchanged throughout the separation. Also, throughout 2021 IBM will continue to invest in NewCo at the same level as in previous years to ensure it maintains its leadership position and can capitalize on the changes taking place.

IBM has been committed to CEE since 1932 and today a full ecosystem of talent and business revolves around our operations in the region. NewCo will continue to serve our local and global clients through country offices, as well as through delivery centres that employ several thousand highly skilled professionals.

This local pool of skilled IT experts, combined with our ability to bring international expertise to the CEE region, puts IBM in the privileged position locally of supporting our clients regardless of whether they are looking for local or multinational delivery.

The pandemic dramatically accelerated digital modernization. As already mentioned, many companies were forced to accelerate, resulting in lasting change, we witness the increasing significance of the CTO/CIO across the world. What do you personally see on the horizon, what businesses need to do today to prepare for the future?

Yes, I agree - during this crisis, especially at the beginning, our colleague CTOs and CIOs and their teams became heroes in their companies. Business owners quickly realised the importance of IT and embraced digitizing their operations at a much faster pace.

Obviously, through the process, that forced us all to start working and living in a different way - travelling less, working from home, using online assistants or gathering at online conferences changed our mindsets. As customers, we became more open to digital solutions to our problems or demands.

This is a huge opportunity opportunity for business in many industries. New, innovative solutions like cloud, AI or blockchain will help them tap this opportunity, but it will come with the responsibility to make those platforms, secure, stable and equally important to use them in an ethical way.