IBM is considering sale of Watson Health amid cloud focus

IBM is considering a sale of its IBM Watson Health business, the move that would help newly appointed Chief Executive Officer Arvind Krishna focus on faster-growing cloud computing operations.

IBM is exploring a range of alternatives, from a sale to a private equity firm or a merger with a blank-check company. IBM is going to boost its share of revenue from hybrid-cloud software and services, which lets customers store data in private servers and on multiple public clouds.

IBM has been trying to boost its share of revenue from hybrid-cloud software and services, which lets customers store data in private servers and on multiple public clouds, including the rivals Amazon.com Inc. and Microsoft Corp. IBM bought RedHat for $34 billion in 2018 to boost this effort.

Krishna said in October that he would spin off IBM’s managed infrastructure services unit into a separate publicly traded company. The division, currently part of the Global Technology Services division, handles day-to-day infrastructure service operations, like managing client data centers and traditional information-technology support for installing, repairing and operating equipment.

While the unit accounts for about a quarter of IBM’s sales and staff, it has seen business shrink as customers embraced the shift to the cloud, and many clients delayed infrastructure upgrades during the pandemic. The spinoff is scheduled to be completed by end of 2021.