HAMPTON, N.H. – Kyndryl (NYSE: KD), a $19 billion spinoff from IBM (NYSE: IBM), operates as an independent company in the managed infrastructure services segment and designs, builds, manages and modernizes mission-critical technology systems. Kyndryl has existing infrastructure services strengths that were built over the years when the company was part of the IBM Global Technology Services (GTS) business unit. Established relationships with 75% of the Fortune 100 companies and more than half of the Fortune 500 companies will enable a smooth start for Kyndryl customers.

The company brings with it skilled talent, intellectual property (IP) and a unified services delivery platform that will support business expansion in areas such as cloud, security, cyber resilience, data, AI, automation and network edge technology across industries. Kyndryl has established efficient organizational, go-to-market and operating models that are less complex compared to IBM’s models for the former GTS business unit.

Additionally, Kyndryl has the freedom to choose which vendors to work with, so the company is progressively expanding its alliances and partner ecosystem with emerging technology providers, hyperscalers and ISVs to improve its ability to deliver solutions based on customers’ choices and needs and collaboratively deliver business outcomes through holistic solutions.

Kyndryl at a glance

  • Kyndryl designs, builds, manages and modernizes complex, mission-critical information systems supporting customers’ digital transformation activities.
  • While Kyndryl is a new brand in the managed infrastructure services segment, the company has an established customer base, skilled talent, IP and expertise around modernizing and managing customers’ mission-critical systems.
  • Kyndryl has the freedom to establish a strategic direction that is aligned to the market in which it operates and has the flexibility to design its operations in ways that enable the company to deliver profitable growth.
  • Kyndryl is positioning to deliver agnostic and multivendor technology capabilities through an expanded partner ecosystem, including by building strategic relationships with leading hyperscalers such as Amazon Web Services (AWS), Google Cloud and Microsoft (Nasdaq: MSFT).
  • Kyndryl is sixth in total IT services revenue and first in managed infrastructure services revenue among the 31 vendors covered in TBR’s IT Services Vendor Benchmark.
  • Kyndryl is taking actions to transform its business and strengthen its revenue, signings and margin profile through 2025, following a plan focused on three areas: alliances, advanced delivery and accounts. The company’s revenue declined 7.5% year-to-year to $4.6 billion in 4Q21 as reported in U.S. dollars and 3.6% year-to-year to $18.7 billion in calendar 2021. Adjusted EBITDA margin decreased to 14.6% of revenue in 4Q21 on a pro forma basis, down from 18.2% in 4Q20, and to 14.7% of revenue in 2021 on a pro forma basis, down from 15.3% in 2020. Signings declined 22.8% year-to-year to $4.4 billion in 4Q21 and 24.2% year-to-year to $13.5 billion in 2021, negatively affected by uncertainty around the spinoff of Kyndryl from IBM.

FREEDOM AND FLEXIBILITY ARE THE DEFINING PRINCIPLES OF KYNDRYL’S ORGANIZATIONAL DEVELOPMENT

On Nov. 3 IBM completed the separation of its managed infrastructure services business to form Kyndryl, which has operations in 63 countries, approximately 89,000 service professionals with an average field experience of more than 10 years, and more than 4,000 blue-chip customers.

Kyndryl has the freedom to establish its own market-specific strategic direction and the flexibility to design its operations to drive profitable growth. The guiding principles for its organization are flatter, faster and focused — flatter in terms of Kyndryl’s new operating model; faster related to speed in delivery through simplification; and focused on providing innovation and value through agility. Kyndryl is also using its existing expertise in infrastructure services, which are supported by a global delivery network and operations in more than 100 countries, and capabilities in designing, building, managing and modernizing mission-critical information systems to bolster its growth. Existing expertise, coupled with global scale; IP, including more than 4,000 patents; methods; models; and breadth and depth of talent enable Kyndryl to advance customers’ digital transformations.

Kyndryl will be part of TBR’s Professional Services and Cloud Services research areas and will be included in TBR’s IT Services Vendor Benchmark and Cloud Professional Services Benchmark. TBR will include Kyndryl data and analysis in TBR Insight Center™, an interactive platform that provides robust and dynamic visualizations of TBR’s benchmark and customer study data, saving customers time and speeding business decision making. After two quarters of earnings, TBR will evolve the Kyndryl profile into a more comprehensive report, with details to be determined based on our analysis of the vendor.