It isn't clear to me what they're doing -- are they spinning off their cloud compute services because those are more profitable? That doesn't make any sense.
I believe the argument they are making is that their non-cloud units are so huge that they overshadow any progress they are making in the cloud space - if cloud profits increased 1000%, it would increase overall revenue by only a few percentage points, essentially. That makes their work on cloud look useless and unsuccessful, when in reality they could be killing it.
That's what they're telling us, anyways. Who knows the real reason.
With IBM Cloud, this is more a Cortés-like point of no return, sink the ships (not burned like popularly thought), only move forward from here, do-or-die type of move.
The other comment threads here are correct: IBM Cloud is struggling for relevance. There are some interesting ideas percolating around, but productionalized operations leaves a lot to be desired compared to AWS. They're in a very distant fourth or fifth place with the likes of Oracle Cloud. I'd possibly place IBM Cloud even behind Alibaba Cloud.
The general idea is that once IBM Cloud sheds the chains of Legacy IBM, IBM Cloud will really take off, since it is finally rid of that pesky, low-margin cruft dragging it down. That "cruft" is why IBM Cloud is even getting warm introductions and walking through the door at all, powered by high-levered sales spiffs to bundle IBM Cloud.
Post-split, IBM Cloud is going to spend massive amounts of time and money trying to get their foot in the door, to get back to status quo ante of easy introductions, swimming upstream against AWS, Azure, and GCP once they separate from IBM-not-IBM. IBM Cloud will also get dragged into brutal discounting wars against Oracle Cloud and everyone else's Me-Too Cloud. IBM-not-IBM will initially proclaim a "close partnership" with IBM Cloud, but once freed from on-high diktats to always use and shoehorn in IBM Cloud, they'll gravitate in a few years to a vendor-agnostic-but-really-only-top-2-or-3 partnerships. If vendor-agnostic cloud even becomes realistic in a revenue-impacting way by then.
I expect IBM Cloud will hold onto RedHat post-split, and will likely try to use RedHat as their warm introduction channel. I hope IBM Cloud surprises all of us with something good.
