Kyndryl: 10 Things to Know About IBM MSP Spin-Out

IBM is on track to spin out Kyndryl as an independent managed infrastructure services provider (MSP) business before 2022. Here’s everything you need to know about the Kyndryl MSP business.

1. Managed IT Services Portfolio: Kyndryl will have six global managed services practices that span:

  • Cloud
  • Applications, Data & AI
  • Security & Resiliency
  • Core Enterprise & zCloud
  • Network & Edge
  • Digital Workplace

2. Advisory and Implementation Services Practice: This will include a “group of senior business and technology executives who can advise Kyndryl customers on best-in-class digital environments and the adoption and integration of advanced technologies.”

3. Customer Base: Kyndryl has relationships with 4,600 customers and a backlog of more than $60 billion.

4. Headcount: The MSP will have roughly 90,000 employees.

5. Executive Leaders: Key executive team members include:

  • Martin Schroeter, CEO
  • Harsh Chugh, Chief Operations Officer
  • Nelly Akoth, Chief Transformation Officer
  • Michael Bradshaw, Chief Information Officer
  • Maryjo Charbonnier, Chief Human Resources Officer
  • Elly Keinan, Group President
  • Vineet Khurana, Controller
  • Una Pulizzi, Global Head of Corporate Affairs
  • Rick Ruiz, Strategic Markets President
  • Edward Sebold, General Counsel
  • Antoine Shagoury, Chief Technology Officer
  • Maria Bartolome Winans, Chief Marketing Officer

6. Global Leaders: Kyndryl will implement a global leadership model for key markets representing more than three-fourths of the MSP’s revenue. The key leaders, announced July 1, 2021, include:

  • Tosca Colangeli, President of Kyndryl United Kingdom and Ireland
  • Xerxes Cooper, President of Kyndryl Canada
  • Paolo Degl‘Innocenti, President of Kyndryl Italy
  • Luis Roca Fernandez, President of Kyndryl Spain and Portugal
  • Markus Koerner, President of Kyndryl Germany
  • Matt Milton, President of Kyndryl United States
  • Kerry Purcell, President of Kyndryl Australia and New Zealand
  • Philippe Roncati, President of Kyndryl France
  • Lingraju Sawkar, President of Kyndryl India
  • Takashi Uesaka, President of Kyndryl Japan
  • Also, Rick Ruiz will become Kyndryl’s Strategic Markets President and will lead Kyndryl’s activities in all other countries.

7. IBM and Kyndryl Competitive Overlap: Once IBM spins out the MSP business, the two companies will surely cooperate — but they could also wind up competing on some fronts. For instance, IBM since June 2020 has acquired the following companies:

It’s a safe bet IBM will retain those acquisitions amid the Kyndryl spin-out, ChannelE2E believes. But Kyndryl may also need some of its own hybrid cloud consulting expertise in order to manage customers’ modernized hybrid cloud infrastructures, ChannelE2E believes.

Also, both IBM and Kyndryl will offer cybersecurity services. IBM has a Top 250 MSSP business unit, as tracked by MSSP Alert. And Kyndryl will need to offer security baked into its MSP services for customer infrastructure, ChannelE2E notes.

8. Kyndryl Stock Market Valuation: To be determined.

9. Kyndryl Stock Ticker: KD, once the spin-off occurs.

10. Kyndryl Annual Revenues: Kyndryl generated $19.4 billion in 2020 revenue on a pro forma basis, down from $20.3 billion in 2019 and $21.8 billion in 2018, SeekingAlpha reported. 1H21 pro forma revenue was $9.4 billion, the report added.

11. Bonus – Kydryl Annual Profits and Losses: The company incurred GAAP losses in both 2020 and 1H21. On an adjusted basis, Kyndryl had pretax profits of $378 million in 2020 and $156 million in 1H21, as per an undisclosed source close to the transaction, according to SeekingAlpha.

12. Bonus – Key Kyndryl Competitors: The list of potential Kyndryl competitors and alternatives, according to ChannelE2E, includes Accenture, Atos, Capgemini, Cognizant, Deloitte, DXC Technology, Ernst & Young (EY), Infosys, HCL, KPMG, NTT, PwC, Tata Consultancy Services, and Wipro, among others.

13. Bonus – Board of Directors: Kyndryl announced these board members on September 28, 2021:

  • Martin Schroeter expands from CEO to Kyndryl board chairman.
  • Stephen Hester, lead independent director and former CEO of RSA Insurance Group.
  • Dominic J. Caruso, former CEO, Johnson & Johnson.
  • John Harris, former VP of business development, Raytheon.
  • Shirley Ann Jackson, president, Rensselaer Polytechnic Institute.
  • Janina Kugel, former chief human resources officer, Siemens AG.
  • Denis Machuel, CEO.
  • Rahul Merchant, senior executive VP of client service and technology, Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA).
  • Jana Schreuder, former executive VP and chief operating officer, Northern Trust Corporation.
  • Howard Ungerleider, president and CFO, Dow.

Blog originally published July 1, 2021. Updated regularly thereafter with new Kyndryl business information.

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    James Rivington:

    will Kyndryl employees lose their IBM seniority and benefits?

    Joe Panettieri:

    Hi James: I don’t know the answer to your inquiry, but will ask Kyndryl representatives that question. If/when I receive a reply we’ll post perspectives in our Kyndryl-related coverage.

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