IBM is splitting itself in two, spinning off its legacy technology services business to focus on cloud computing and artificial intelligence, a move that reflects how decisively computing has shifted to the cloud.
The split is IBM’s effort to grab more of that fast-growing business and thrive amid the market leaders, Amazon Web Services, Microsoft and Google.
The business retaining the IBM name will include its cloud operations, along with its hardware, software and consulting services units. They represent about three quarters of the current company’s revenue.
The business to be spun off, in a company that has not yet named, is IBM’s basic technology services business, which maintains, supports and upgrades the computing operations of thousands of corporate customers.
That business is sizable, with sales of about $19 billion a year, but it’s not where the growth opportunities lie in the technology business.
The split comes as IBM has been unable to generate overall growth for years, disappointing investors, as the erosion of its old-line businesses held it back. Last year, the company’s revenue declined by 3 percent, to $77 billion.
The split, IBM’s chief executive, Arvind Krishna said, was intended to “unlock growth,” adding that IBM should deliver “mid-single-digit” revenue growth over the next few years.
IBM shares rose more than 7 percent in early trading.
The company has positioned itself as a champion of a “hybrid cloud” strategy. It is trying to take its corporate customers into cloud computing — a more flexible, typically pay-for-use model — without abandoning its old technology altogether. But it lags behind the biggest, cloud providers, led by Amazon and Microsoft.
Its hybrid approach is an attempt to carve out a lucrative, growing business in the cloud market without competing head-to-head with the cloud leaders, each of which spends tens of billions of dollars a year on vast data center networks.