Following last month’s announcement regarding the separation of its infrastructure services division, IBM’s commitment to hybrid cloud is now undeniably clear. During a recent interview with Jon Fortt at the CNBC Evolve summit, IBM CEO Arvind Krishna emphasized that the company’s primary objective is to evolve into a leading hybrid cloud management provider.

This shift signifies a change in strategy, moving away from a primary focus on direct sales of infrastructure or software solutions – though these will remain a part of the business. Instead, IBM intends to utilize Red Hat, acquired in 2018 for $34 billion, to assist clients in overseeing their hybrid environments, irrespective of their location, whether on-premises, with public cloud providers, or a combination of both.

Krishna views this acquisition as essential to the company’s transition strategy, aiming to capitalize on an estimated trillion-dollar market opportunity in hybrid cloud management. He believes IBM is favorably positioned to secure a significant share of this market. “The Red Hat acquisition provided the technological foundation for constructing a hybrid cloud platform rooted in open-source principles and client choice. The success of this acquisition now provides the impetus to proceed with the separation of our managed infrastructure services, allowing the remainder of the company to concentrate fully on hybrid cloud and artificial intelligence,” Krishna explained to CNBC.

While acknowledging the strength of Microsoft and Amazon in the public cloud arena, Krishna doesn’t perceive them as direct competitors, but rather as potential collaborators within this evolving landscape. Integrating a diverse range of third-party partnerships is a crucial component of this strategy.

“I anticipate both Microsoft and Amazon will be valuable partners in this process, rather than being the dominant forces in market share. In a hybrid environment, the central question is where the client prefers to run their workloads. They could choose Amazon, Microsoft, IBM, or an on-premises solution,” he stated.

He anticipates Red Hat will serve as the unifying element, enabling customers to manage the inherent complexity of these environments through a single, streamlined interface. A critical factor for IBM’s success will be whether clients recognize IBM – and, by extension, Red Hat – as the pivotal vendor for this role.

Krishna understands that this transformation extends beyond simply adding or removing technological components. Successfully altering the business approach necessitates a substantial cultural evolution, similar to the one Satya Nadella spearheaded upon becoming CEO of Microsoft in 2014. Like Nadella, Krishna was promoted from within, possessing an understanding of the company’s internal operations and the need to modernize traditional practices at IBM.

“I’ve consistently emphasized the importance of a growth mindset and a more entrepreneurial spirit internally. Even within large organizations, we can foster entrepreneurship through intense focus. By concentrating on hybrid cloud and artificial intelligence – the two fundamental driving forces – we can empower everyone to pursue these opportunities,” he said.

This will be a key challenge for him going forward, as transforming a company of IBM’s scale presents a significant leadership undertaking. As Fortt highlighted, IBM’s sales force is accustomed to prioritizing IBM products. This new approach requires a broader market perspective, demanding a shift in mindset. Krishna’s leadership will be essential in aligning his employees with this new vision, as the success of this strategy hinges on their collective understanding and commitment.