Hello everyone! From the first day as CEO, I promised to promote the development of IBM. I once said that focusing on the open hybrid cloud platform and artificial intelligence is the key to achieve this goal. We work hard day after day, focusing on every product and every project-we are committed to helping customers release the great value contained in it.
On the solid foundation laid by Ginni, we focus on accelerating the growth strategy of hybrid cloud and focusing on the hybrid cloud market, with market opportunities reaching trillions of dollars.
When we work towards this goal, two things become clearer and clearer. First of all, we see a sharp increase in customer demand for our capabilities and expertise. Secondly, we have noticed that customers' demand for applications and infrastructure services is constantly diverging.
Therefore, we decided to split the infrastructure management service of Global Information Technology Services (GTS) and become an independent new company (NewCo). We expect the new company (NewCo) to be established at the end of 20021. IBM will focus on developing an open hybrid cloud platform and artificial intelligence. The new company will focus on providing infrastructure management services.
I believe this is a wise move and will create a brighter future for us. After the split, both companies can give full play to their respective advantages and specialize in their best fields. So I am very excited about the company's development prospects and the huge value that will be released soon. Our customers, employees and shareholders will all benefit from it, and IBM and NewCo will advance hand in hand along a clearer development track.
IBM: Focus on developing open hybrid cloud platforms and artificial intelligence, and actively promote growth.
In order to promote growth, our strategy must be based on the present situation and grasp the future needs of customers.
Nowadays, hybrid cloud and artificial intelligence are rapidly becoming the carriers of business and transactions, and they will also become the carriers of computing itself as time goes by. The driving force behind this change is the ever-changing customer demand. They found that the value of choosing an open hybrid cloud is 2.5 times that of adopting a single pure public cloud.
We know that concentration will create great value. Our goal is to focus on what is most important to our customers and try our best to push them forward. After the split, IBM will focus more on promoting innovation, accelerating the pace of development, and injecting more strategic investment into our future business development.
Therefore, IBM will accelerate the simplification and optimization of our business model through this major change to achieve rapid growth. The cost savings brought by these measures will enable us to gain greater financial flexibility, enable us to invest in open hybrid cloud platforms and artificial intelligence, and accelerate innovation to the market.
Going all out to develop an open hybrid cloud platform and artificial intelligence solutions will create greater value for our customers, companies and shareholders. This change will create the most favorable conditions for the accelerated growth of IBM.
At present, service revenue accounts for more than 60% of IBM's total revenue. After the new company becomes an independent company, most of its revenue will come from its software and solution portfolio. This means that our business model will undergo a major change. The successful acquisition of Red Hat makes us believe that this change is a wise move.
Our goal is to seize the trillion-dollar hybrid cloud market, so this decision is logical. Through the acquisition of Red Hat, we have established an open and secure hybrid cloud platform, which can cover any location of customer computing, whether it is local, private or public cloud environment. This is the key first step to seize this opportunity and consolidate the follow-up development.
Since IBM and Red Hat walked hand in hand, their position in the market has been obviously improved. Customers' demand for our open hybrid cloud platform has greatly increased. The driving force behind this is that customers have discovered the great value of this hybrid cloud architecture, which is based on open source innovation and can provide a variety of selection and control functions.
Since Red Hat joined our product portfolio, we have not only launched Cloud Paks, but also strengthened our system product portfolio. In order to meet the most stringent requirements of the financial services industry, we have built an industry-specific cloud for them. In addition, we also enhanced our hybrid cloud and artificial intelligence capabilities by acquiring two companies (Spanugo and WDG Automation).
An important part of the value of our open hybrid cloud platform lies in the expertise and services we provide to help customers realize their transformation journey, whether it is application modernization, cloud native application construction or migration to the cloud. This occupies most of the market opportunities worth $65,438+0 trillion.
The huge partner ecosystem that we are building provides inexhaustible power for our open hybrid cloud platform and promotes the adoption and promotion of the platform. With the release of resources, we will continue to develop more strategic cooperative relations. For example, we have recently established strategic partnerships with Tech Mahindra, Adobe and Schlumberger.
One thing is certain. Defining the key points is only the beginning of this journey. In order to realize our ambition, we should persistently establish a corporate culture, encourage learning, frankness and curiosity, and pursue speed and innovation-growth and entrepreneurial thinking.
NewCo: a global leader in infrastructure management services
As an independent company, NewCo's future is worth looking forward to. Facts have proved that the new company has excellent professional knowledge and ability to manage complex and critical infrastructure for the most important enterprises in the world. NewCo will become a leader in infrastructure management services on the day of its establishment, and its annual revenue will be as high as $654.38+09 billion, which is twice that of its nearest competitor.
NewCo has more than 4,600 customers, including more than 75% of Fortune 100 companies. NewCo's business covers the whole world 1 15 countries/regions, and has more than 90,000 employees with professional backgrounds in various industries, who are responsible for important and in-depth technical work.
As an independent company, the new company will be able to establish a more efficient operation mode, focus on improving the quality of service delivery, and provide customers with the next generation of infrastructure management services.
The new company will also be more flexible in establishing more cooperative relationships and developing alliances in the field of infrastructure management services. This will open up a new development path for the company.
The two companies will continue to maintain close cooperation, because NewCo will remain IBM's preferred infrastructure partner in the future. At the same time, the technical support service (TSS) business department of GTS department is still an indispensable part of IBM.
Constant aspect
Our decision to set up a new company is an important move. This will certainly bring about changes, but it is also important for me to explain what will not change.
Perhaps the biggest advantage of the two companies in planning their own path and future development direction is our corporate mission. The two companies share the same gene, that is, deep understanding-how to apply computing power, how to solve complex problems, and how to cooperate with customers to develop solutions suitable for their industry needs.
Most importantly, IBM and NewCo will continue to believe that only by helping our customers succeed can we succeed. For these two companies, the success of customers is still their goal. In our efforts to achieve the goal of setting up two independent companies before the end of 20021,I hope you will continue to pay attention to the success of customers. Everyone should always remember that our mission is to achieve customers, and we should continue to unite as "one IBM" and strive for our common goal.
Leadership is not innate. To maintain the leading position, we need to constantly reshape, persist in innovation, dare to challenge tradition and make bold decisions in the right direction. Today, we are doing this. This is also the internal spirit of IBM.
In order to better promote the development of customers, so that they are not afraid of technological innovation and keep up with the pace of the technological era, IBM has been transforming. Every important historical moment of IBM has never deviated from this line. From punched cards and vacuum tubes to transistors, mainframes, personal computers, and today's hybrid cloud and artificial intelligence, the development of IBM is largely a company's pursuit of sustainable transformation.
I am very excited about the future development, and I firmly believe that we will achieve sustainable growth at all levels. Qixin Qi Xin works together to promote the company's development, strives for personal development, devotes itself to improving the ability to serve customers, and is determined to strengthen our influence in the world.
This is an important turning point in the future development, and our customers, employees and shareholders will all benefit from it. I hope everyone can base themselves on new areas of focus and work together to create a better future.