Kyndryl targets new markets with IBM spin-off

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Kyndryl, formerly IBM’s managed infrastructure services business, is now an independent company. On November 4, 2021, it began trading independently on the New York Stock Exchange with the ticker KD.

While there are still strong ties between the two companies – IBM retains a 19.9% ​​stake in Kyndryl, which will remain one of its biggest customers – the split opens up new opportunities on both sides.

For Kyndryl, these opportunities include supporting new businesses in markets such as intelligent automation, data services, cloud services, or security and resiliency. The company estimates that these new domains increase its total addressable market from $ 240 billion to $ 415 billion immediately after the split. Today, it captures a small fraction, with annual sales of $ 19 billion.

Technology, in the form of the tools Kyndryl creates and uses to deliver services to its customers, will play an important role in harnessing these opportunities, said Kyndryl CTO Antoine Shagoury.

He is well aware of the capabilities of the company. A former CIO himself, most recently at State Street and before that at the London Stock Exchange, Shagoury was a client of both the old IBM and what is now Kyndryl.

His first reaction when IBM approached him about Kyndryl’s CTO position, he said, was, “Are you asking me as a former customer? You better sit down and grab a pen, because I have a lot of issues that we’re going to have to solve. This didn’t deter both sides: “It was one of those fun discussions, and it got really exciting to be exposed to the appetite to bridge the gap and to really start positioning what Kyndryl is becoming now, this facilitator, this facilitator. Services.

Antoine Shagoury, CTO, Kyndryl Kyndryl

Antoine Shagoury, CTO, Kyndryl

Some of the issues Shagoury wanted to solve related to what he calls the “environmental issues” of what the managed infrastructure services company was supposed to do. “There were a lot of blinders. These were very specific subsets of applications, very focused on the IBM cloud, ”he says.

This part of IBM was as deeply ingrained in customer organizations as it was in customers’ own teams, he says. In this situation, “the way you can help the customer navigate the complexity of modernization, digitalization and market availability around this paradigm shift becomes very limited. “

These constraints are gone now, as Kyndryl creates his own way of working with clients.

Understandably, customers will have concerns about Kyndryl’s separation from IBM: Shagoury says that when he worked in banking, “this kind of separation would have stopped everyone in the building.

What CIOs are asking for

Concerns about service continuity are a priority for many Kyndryl customers, but there is no reason to worry, Shagoury says: Kyndryl and IBM are among the largest suppliers and one of the customers. other and are committed to ensuring business continuity for their clients.

After concerns about too many changes, there are CIOs concerns about whether there will be enough changes: they want to know if they will continue to see innovation under Kyndryl.

Of course they will, says Shagoury: “We’re one of IBM’s biggest customers: we have direct access to research results. If there is something so unique to IBM, we can easily ensure that it will be part of the discussion, the opportunity and the inclusion.

Kyndryl will also be a full-fledged innovator, he says, starting with 3,000 patents granted, 800 pending and more likely to be filed by the end of the year. “We’re a lot more innovative than people think,” he says. “Almost 40% of our patents relate to AI. You wouldn’t think of this for an infrastructure company. These inventions will not simply be offered for sale. “In fact, we want to use them for the customer, for their modernization and transformation work.

The third big concern CIOs have raised about the split, he says, is whether they will still have access to the right partners. “They come with a list of the people they want us to partner with,” he says. “Every operating environment is different, and the recipe for helping someone modernize or optimize their environment is never the same twice. You need to make sure you have the right partners at the table with you.

Kyndryl’s new leadership has educated people internally and externally on how they can help create the partner ecosystem environments that will help the business thrive, he says.

The role of technology

Technology will play a key role in activating the ecosystem, and Shagoury’s role is at the heart of that. “I lead all the development, all the architects, all the research and the platforms themselves. So how do we deliver the tools and the services, as well as the strategic platforms, how are we going to deliver our services in a new way in the future in this ecosystem model, ”he says.

He wants to showcase the technology Kyndryl has inherited, and will build, so that his employees working in different industries, in different practices, are aware of what is available and can see if it is applicable to their jobs.

Much of this technology is about automation. “We perform over 9 million automation activities each month for customers,” Shagoury says, including server lifecycle management, incident response and remediation, right through to asset management services. and fixes. Automation is soaring, he says, and now includes robotic process automation (RPA) services and programmatic automation services beyond.

The managed infrastructure services company that is now Kyndryl has collected metadata about its operations. “We have now created one of the largest operational data lakes in the world around this metadata, so now we have AI components that now power our customer operations or automation tools, as well as our planning tools. He said.

Open the ecosystem

Shagoury doesn’t want the knowledge of these tools to remain buried in Kyndryl. “These tools are very rarely exposed to our partners and customers. And that becomes a huge opportunity for us, ”he says. “Now we lay that out to the client, saying, ‘Hey, do you want to take a look at these tools yourself? Do you want to see how we can actually help you be a part of what we’re working on, so you don’t need all of the managed services? ‘ “

Its goal is to open up the possibility for customers to choose from a self-service menu of Kyndryl’s capabilities, or to bring partners deeper into the Kyndryl ecosystem.

“If I came to you today and we wanted to think about something, you’re going to want to have everything on the table: ‘What are the ingredients that we have to work with? What will help me modernize faster, be more competitive, adopt technology more securely for my business? “And that’s the best recipe for designing and designing the right outcome for the customer,” he says.

Copyright © 2021 IDG Communications, Inc.


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