IBM Spin-Off Kyndryl Teams With Cisco For ‘Co-Creation’ Of Managed Network, Edge Services

The solution provider giant, now independent from IBM, is partnering with Cisco to jointly create polished managed services solutions for enterprise customers.

Kyndryl, the IT infrastructure services provider that was spun out of IBM’s managed infrastructure services business, has joined forces with Cisco Systems in a technology partnership that brings together Cisco’s products and Kyndryl’s managed services prowess.

The solution provider giant is adding Cisco’s technology to its Network and Edge Computing Solutions practice that targets enterprise customers. The two companies will co-develop new private cloud services, network and edge computing solutions, software defined networking (SDN) solutions and multi-network WAN offerings with advanced security capabilities, Paul Savill, global network and edge compute practice leader for Kyndryl, told CRN.

“It’s not just about a new sales approach with Cisco, it’s also about us working with them in a co-innovation manner,” Savill said. “This new alliance is meant to express that we’re going to be looking into areas where we can innovate together; where we can co-create new technologies and new capabilities together that we can deliver solutions to customers.”

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Cisco and the Kyndryl business, when it was part of IBM, had a previous relationship which involved Kyndryl offering Cisco’s equipment as part of its managed services stack. “We were reselling Cisco equipment as part of the solutions that we put together for customers. With this arrangement, what we’re looking to do is to actually partner more closely with Cisco on putting together the solutions on a managed services front around edge and cloud networking capabilities,” Savill said. “We’ll be engaging more with clients in more of a sell-with motion than what we’ve done in the past.”

Via the new partnership, Cisco and Kyndryl will jointly provide technologies, infrastructure expertise and managed services that can support a customer’s cloud evolution, starting with strategy and migration, through to running, maintaining, and supporting complex IT environments, the companies said.

Cisco believes that managed services will be the primary buying model for IT services in the future. The tech giant saw 31 percent growth in partner managed services in 2021. Forty-five percent of Cisco’s market opportunity by 2025 will go through the managed services route to market, marking a whooping $113 billion total addressable market for Cisco and its partners.

Managed services are naturally a partner-first sales motion. Cisco is doing 95-98 percent of managed services through the channel right now and is planning on growing its managed services business through the channel in the coming years, the company said in March.

Today, Kyndryl is one of Cisco’s largest MSP partners, according to San Jose, Calif.-based Cisco.

“At Cisco we see an immense opportunity in the intersection between managed services and the drive to as-a-service models. We are working with our provider partners to build outcomes-based offers that are tied to pre-scoped sizing and packages, complemented with simple service tiering. In collaboration with partners, we are moving from operations-focused offers to more catalog-based consumption-driven services,” Keith Dyer, vice president of Cisco Global Enterprise Sales and Cisco’s Global Partner Organization, said in a statement on the partnership.

The collaboration with Cisco will help Kyndryl reach more customers with its Network and Edge business practice. The relationship will also allow Kyndryl to tap into Cisco’s large, global partner ecosystem, Savill said.

“Cisco brings a lot in terms of their enterprise reach that they that they have in the market,” he said. “We definitely see Cisco and their channel as a way of growing our business [but] as part of this arrangement, we’ve got work to do in terms of making our managed services capabilities more easily packageable so [Cisco] can bring Kyndryl into more complex, custom manage services solutions.”

Kyndryl in May announced it achieved 27 percent growth in signings during its first quarter as an independent company and following three years of declining signings when the firm was a unit within IBM. Kyndryl has a services deal pipeline of more than $1 billion in additional revenue with hyperscaler cloud providers and plans to grow through collaborations with tech leaders, such as Cisco and NetApp, the company said.

Kyndryl has operations in more than 60 countries. The firm has about 4,000 customers and counts about 75 percent of the Fortune 100 companies as customers today.