ARMONK, N.Y. (AP) — IBM states it is breaking off a $19 billion chunk of its small business to target on cloud computing.

The 109-calendar year-old tech enterprise reported Thursday it is spinning off its managed infrastructure expert services device into a new public firm, quickly named NewCo. The separation is predicted to choose outcome by late 2021.

IBM CEO Arvind Krishna reported the split will help IBM concentration on its cloud system and artificial intelligence, though the freshly fashioned organization will give expert services to deal with the infrastructure of corporations and other businesses.

IBM’s annual income was $77.1 billion final yr. Krishna claimed in April at his to start with quarterly earnings get in touch with as CEO that the corporation will continue on to reduce software package and providers that never align with IBM’s leading two concentrate spots for expansion: cloud computing and artificial intelligence.

The moment a household identify for its personal pcs, IBM lose its Computer organization in 2005 and has considering that turn into centered on supplying software package companies to major enterprises, governments and other organizations. It has worked to reinforce its cloud computing business but has struggled to contend with major cloud rivals Amazon, Microsoft and Google.

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