Kyndryl partners with Microsoft in first major deal since IBM split

The two companies will work on jointly-developed cloud services that will be available to customers on both sides

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Image: Kyndryl via Future Publishing

12 November 2021

Kyndryl has signed a cloud migration partnership with Microsoft, considered to be the first major deal for the company since its official split from IBM.

The two companies will develop new products built on the Microsoft Cloud to drive digital transformation for customers, and Microsoft has become Kyndryl’s only Premier Global Alliance Partner.

The companies are set to accelerate hybrid cloud adoption, introduce AI innovations, and help transfer more mission critical workloads to the cloud. They will also jointly work on a co-innovation lab where they will build products on the Microsoft Cloud, with Kyndryl making them available on Microsoft’s AppSource and on the Azure Marketplace.

In return, Microsoft will make products developed by the two companies available for its global enterprise sales force as well as creating a training programme for Kyndryl’s nearly 90,000 employees, dubbed Kyndryl University for Microsoft, which has been designed to teach workers how to best use Microsoft’s cloud tools.

“As an independent company, we’re investing in our partner ecosystem to support the success of our customers, and we’re focused on expanding our market opportunity across cloud, data, security, and intelligent automation,” said Martin Schroeter, chairman and CEO of Kyndryl. “In this landmark relationship with Microsoft, Kyndryl is matching our deep expertise in mission-critical IT systems with the benefits of Microsoft Cloud to be at the heart of progress for our global customers.”

Kyndryl completed its previously-announced spin-off from IBM last week, which it hoped would give the business more freedom to pursue new opportunities. The company now claims to be the world’s largest IT infrastructure provider with around 90,000 professionals worldwide, and is looking to deliver advisory, implementation, and managed services to over 4,000 global customers. The company also hinted it was looking to form new partnerships in new areas, like application 5G networks.

IBM temporarily retained 19.9% equity ownership of the new company, with shareholders receiving one Kyndryl share for every five IBM shares owned. The giant would also continue on as Kyndryl’s largest customer, and Kyndryl would be IBM’s largest customer in return, as revealed by Sam Maatallah, general manager of Kyndryl strategic markets.

Maatallah said there is still a strong relationship between the two companies and they were going to continue to team up and create products together. However, he also underlined the new freedom Kyndryl has to team with other players in the market.

“Unleashed from IBM, we have the freedom to invest for growth, while expanding our ecosystem of strategic partners and services capabilities,” said Maatallah. “As an independent Kyndryl, we’ll work with a much bigger ecosystem unlocking more opportunities to participate across platforms.”

IBM’s decision to split its business in half by spinning off its infrastructure services unit into a separate company was revealed a year ago, which saw it end a strategy that saw it try to shift towards cloud growth while keeping its legacy business. Following the split, IBM said that it would then focus entirely on its AI capabilities and the hybrid cloud, which it described as a $1 trillion opportunity.

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