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CNN Business Exclusive: 109 year-old IBM is planning to take on Amazon. Here's how

August 13, 2020. Summarized by summa-bot.

NEW YORK, NY - JUNE 16: SVP and Director at IBM Research Arvind Krishna speaks on stage during the 2016 Wired Business Conference on June 16, 2016 in New York City. (Photo by Brian Ach/Getty Images for Wired)

When former IBM cloud leader Arvind Krishna took over the company's top job earlier this year, the move sent a clear signal about where the company sees its future.

New York (CNN Business)When former IBM cloud leader Arvind Krishna took over the company's top job earlier this year, the move sent a clear signal about where the company sees its future.

In an effort to spur new momentum, IBM has been working to reorient itself around the cloud business — a strategy boosted by its 2018 acquisition of open source software provider Red Hat, which Krishna helped to broker, and solidified by his ascension to CEO in April.

To that end, IBM told CNN Business it has set aside $1 billion to invest in other companies in the cloud space — third party software providers and digital IT vendors — to grow the ecosystem of firms working on its hybrid cloud platform.

IBM's investment fund will help provide incentives for those third party software companies to build on top of its own architecture, such as covering the costs of migration services.

A hybrid cloud model makes sense, especially for the large, legacy companies IBM has long worked with.

If it works, though, the payoff could be huge — IBM estimates that hybrid cloud represents a $1. 2 trillion market opportunity over the next two years.

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