Kyndryl Completes Separation from IBM and Begins Trading on NYSE as World’s Largest Independent IT Infrastructure Services Provider

Kyndryl today announced that it has completed its previously announced spin-off from IBM and began trading as an independent company on the New York Stock Exchange under the ticker “KD“.

We talked with Rick Ruiz, President, Kyndryl Strategic Markets on Kyndryl - the world’s largest IT infrastructure provider, the company that has $19 billion in annual revenue and differentiated approach that integrates development, security and operations.

Congratulations, today Kyndryl became an independent company and began trading on the New York Stock Exchange. It's expected that Kyndryl will the key player when it comes to managing IT infrastructure. Could you please tell us more about Kyndryl as an independent company, what are your investment and business plans globally and in Europe and Central and Eastern Europe?

Drazen, thank you for connecting with our team and with me. I’d like to take a step back and start with the very basics of Kyndryl - who we are and what we do. At its core, Kyndryl is a true IT services company with a customer-centered culture. We help customers design, manage, and modernize the technology systems that the world depends on every day. And as you’d expect from a services company, at the heart of our business are our people and our customer relationships.

As we begin our first day as the world’s largest, independent IT infrastructure services provider, 90,000 talented professionals represent our company. And our team at Kyndryl supports the operations of more than 4,000 customers around the world, including 75% of the Fortune 100 and more than half of the Fortune 500. These customers make 45% of the world’s passenger cars. They account for 50% of hypermarket retail sales around the world. Our customers manage nearly half of the world’s mobile connections. And our large bank customers represent 60% of total assets managed. So this is truly about Kyndryl driving mission-critical requirements for customers.

Another way to look at the global scale of capabilities we bring to our customers is to consider that Kyndryl manages the vast majority of mainframes on the planet, with 6 trillion instructions processed every second. We provide 2 million terabytes of storage. That’s a two with 12 zeros behind it. We also manage 750,000 virtual servers and 270,000 network devices. And Kyndryl manages over 25,000 SAP and Oracle systems.

This is the team that invented how the industry does IT transformation and we’ve successfully completed more of these engagements than anyone. It’s a team that’s deeply experienced with hybrid IT and multi-cloud environments as well as working with new and emerging technologies like Edge and 5G.

I think we can all appreciate the digital transformation in every industry that was accelerated by the global pandemic. IDC estimates that 65% of global GDP will be digitized by the time we begin the new year in 2022. Digitization is the fundamental driver of our business. Many companies are just beginning their digital journeys. One-third of CEOs are planning to increase their cybersecurity investments by double digits. I’ve just returned in the last week from visits with customers across 6 European countries - starting in Brussels, Belgium and concluding in Warsaw, Poland - and what I’ve heard is consistent with that research. Increasing complexity of IT infrastructure and a lack of skills are real barriers to transformation - and that’s where Kyndryl comes in.

Therefore, our business plan is focused on continuing to deliver for our customers while helping them capture new value from innovation and also taking on new customers given our expanded options in the market.

Our talented team doubled our cloud certifications for platforms like AWS, Azure, GCP, and others over the last 12 months alone. As an independent company, this freedom to invest in and build on capabilities with more partners will enable Kyndryl to serve an expanded $500+ billion addressable market that’s driven by an explosion in data and analytics; migration to the cloud; and an urgent and obvious need to make information and technology systems much more secure.

And another view on our investments are the 19 customer innovation centers across the globe, which reflects our scale. Tens of thousands of our Kyndryl employees bring their expertise to customers from the Centers, for example, in the Czech Republic, Hungary, Slovakia, Poland, Romania, and Bulgaria.

In fact, as another sign of our investment in this business and its people, we’re also hiring for architects, developers, engineers, and more across Europe - including the countries I’ve mentioned.

What are your top 3 offerings, services which you will offer to the clients? And who are your key clients?

What sets Kyndryl apart in the market is our ability to extend our deep mission-critical capabilities to more contemporary digital environments for customers. That’s why our new company brings a new integrated portfolio that’s aligned to 6 global practices:  Cloud Services; Core Enterprise and zCloud; Digital Workplace Service; Applications, Data & AI Services; Security & Resiliency; and Network and Edge.

We also offer advisory, implementation and managed services across technology infrastructures to help customers accelerate their individual journeys and tackle IT challenges to capture operational efficiencies, reduce risk, and maintain business continuity.

As I mentioned, Kyndryl’s 4,000 customers include half of the Fortune 500. Most recently, ABN AMRO (one of the largest banks in the Netherlands) jointly announced a 420 million Euro deal with Kyndryl and IBM to help modernize its IT operating model to enable public cloud, agile, and DevOps as it pursues a strategy to be a leading personal bank in the digital age. We share a long-standing relationship with the bank and this recent announcement illustrates how Kyndryl capabilities and service delivery will be embedded into ABN AMRO’s environment for an even tighter partnership going forward.

In another example, the global packaging and paper group - Mondi - recently shared the steps they’re taking to capture new growth for their business beyond the pandemic and in light of the burgeoning demands of e-commerce and the opportunity it has presented them. Mondi is converting 40 factories across 15 countries to the cutting-edge SAP S/4HANA platform with zero downtime - and they’re doing this with Kyndryl. Please watch their story.

Jumping to another corner of the region, in Turkey, is our work with Isbank - the first public bank established by the Turkish Republic in 1924. They operate 23 branches in other countries too. The bank experienced a severe network outage, finding itself in need of migrating servers, apps and data to a new data center to ensure resiliency. And to cover that transition, all without disrupting network operations. The Kyndryl team migrated 6,000 servers, 750 applications, and 4 PB of data in nine months for Isbank, earning the Uptime Institute Tier 4 certification - the first data center in Turkey to meet these standards.

Kyndryl is free to expand partnership base after IBM separation. But what will be your focus areas in this segment, shall you focus on the partnership with core IT companies only or you will have alliances with wider organizations? And shall there be a different criteria in selecting the partners globally and locally?

We enjoy a reputation as trusted partners for integrating tools and vendors in the data center. We’ll still do that, but we now have the freedom with our independence to ramp up our focus on innovation. It’s all about going after a new market opportunity and using our experience and our intellectual property to the benefit of our customers.

This new freedom to operate and invest is one of the key design points behind the spin as Kyndryl expands beyond an IBM-centric ecosystem. As Kyndryl, we’ll pivot to the broader set of fast-growing transformational services and build partnerships that’ll result in growth more in line with the market. Our ecosystem will include hyperscalers, systems integrators, independent software and hardware providers, and next-gen technology firms. And IBM will continue to be an important partner for us too.

In addition to skills, capabilities and the passion to expand our ecosystem, Kyndryl brings trusted reliability for mission-critical requirements. Kyndryl manages over 31,000 service level agreements, achieving an attainment of 99.8%. Independent IT analysts, including IDC, HFS, and more recognize our strong service management and integration capabilities and we think these proven abilities matter to customers and partners when they consider the company they keep.

Another signal of how we’ll be a different type of partner are the critically important goals that we see for sustainability through a new lens on environmental, social, and governance. On the environmental front, for example, we will establish our targets for renewable electricity and for reductions in greenhouse gas emissions. We’ll invest in technologies to drive reductions for our customers. On the social front, we intend to make a positive impact on society through our operations and our practices. It’s all about Kyndryl making the moves to establish ourselves as a responsible corporate citizen right from the start.

In your opinion, which technologies will shape the world in the future, what is expecting us?

In my opinion, the technologies that are shaping the world of the future include cloud, data, security, and intelligent automation. In my conversations with customers, these areas truly represent a significant portion of their transformation journeys.

That's why Kyndryl is building 6 global practices that are linked to these opportunity areas. These 6 global practices represent the primary ways Kyndryl integrates services and technologies to help customers realize their digital transformation objectives Cloud, Applications, Data & AI Security & Resiliency, Core Enterprise & zCloud, Network & Edge, Digital Workplace.

To give you a bit more context, let's look at our focus on cloud services. Previously, cloud services were infrastructure services tied to the IBM public cloud and IBM's ecosystem. As an independent Kyndryl, we'll work with a bigger ecosystem, unlocking more opportunity to participate across platforms. So the market didn't change, but what we're able to do, changes.

Data services is another good example. Previously, data services meant we managed databases and spinning disks, hard drives and storage. Now as an independent company, Kyndryl is pursuing higher value data engineering services, curation, orchestration, and more. These are the growth areas powering our customers' digital transformation through the next era.

When we talk on innovation and technology, how is Kyndryl position in terms of research and development? I read that Kyndryl has created more than 3,000 patents - where are your R&D centers, do you have any in Europe?

Our customers are constantly under pressure to adapt, change and technologically transform to be better prepared for the future in front of us.

We want these customers to know that when they turn to Kyndryl, they can be confident that we’ll bring them the best and most modern business solutions with the premier technologies in the world, no matter what company developed them. That was not always the case before today, but it’ll be the rule of the road here from now on.

We come to customers from a unique point of view, working with them in the trenches in real-time, to deliver agile, focused solutions around their mission-critical requirements. The nature of the work Kyndryl leads with industry leaders - from banks to telcos and transportation providers and much more - enables us to efficiently anticipate key areas of opportunity and development requirements.

To continue to be the strongest trusted partner for them, Kyndryl is leading a few paths to innovation and technology with our customers.

One is through institutional research, such as core scientific research. We'll continue to partner with IBM, for one example, and we'll expand to work with others in this area too.  Another is M&A, which we've shared is an option in front of us.

Finally to tie back to the points I began with, we see our operational data and intellectual property as key differentiators. Now, remember that we work with more than 4,000 customers across mission-critical requirements. They represent 75% of the Fortune 100; half of the Fortune 500. We add two to four terabytes to our data lake daily. Our scale, as the largest IT infrastructure services provider, gives us a natural advantage. We identify advanced operational IT patterns that generate new insights that'll form the basis of our customer value.  That's all on top of the 3,000 patents. By the way, with 800 patents pending and 200 being filed.