Kyndryl Free to Expand Partner Base After IBM Separation

Kyndryl, IBM’s managed infrastructure services business, is set to expand its partner base once its separation from IBM is complete.

That’s according to an IBM filing this week with the Securities and Exchange Commission (SEC). IBM expects to complete the Kyndryl separation by the end of the year.

Once the separation is complete, Kyndryl‘s stock will trade on the New York Stock Exchange (NYSE) under the ticker symbol “KD.” IBM will continue trading on the NYSE under the symbol “IBM.”

Kyndryl has 4,000 customers in more than 100 countries. It designs, builds and manages private, public and multicloud environments to accelerate customers’ digital transformations.

IBM’s Arvind Krishna

Arvind Krishna is IBM‘s chairman and CEO.

“As separate businesses, each can capitalize on their respective missions,” he said in the SEC filing. “Both will have more agility to focus on their operating and financial models. Both will have greater freedom to partner with others. And both will align their investments and capital to their strategic focus areas.”

Broader Partner Ecosystem

As an independent company, Kyndryl says it will be free to broaden its partner base. That includes a wide range of hyperscale cloud providers, SIs, ISVs and technology vendors “from startups to market leaders.”

“This enables us to serve our customers with the contemporary technology capabilities that best fit their needs and open new avenues for growth,” it said. “This is all underpinned by our ability to integrate and operate mission-critical technology at scale using deep engineering expertise and intellectual property.”

Kyndryl’s revenue declined in both 2020 and the first half of 2021. It reported $9.5 billion in revenue, a decrease of less than 1%, for the first half of this year compared to the prioryear. Declines in the Americas drove the revenue drop.

In 2020, Kyndryl reported $19.4 billion in revenue. It declined 4.6% compared to the prior year, once again driven by declines in the Americas.

Client volumes dropped within industries heavily impacted by the global pandemic, Kyndryl said in the SEC filing.

Massive Addressable Market

Kyndryl estimates its addressable market is $415 billion growing 7% annually to $510 billion in 2024.

“Growth in this market is driven by services that are aligned to customers’ transformations, and represent an incremental $75 billion,” it said. “These transformation services include several high-growth portions of the market that each exceed approximately $10 billion in opportunity, including public cloud managed services, data services, security service and intelligent automation services. Managed services for edge environments represents a smaller portion connected to many other opportunities, and itself is expected to experience compounded annual growth above 100% from 2021 to 2024.”