Kyndryl’s account-based growth journey

In November 2021, IBM spun off its managed infrastructure services business under the new name Kyndryl. The company would have several focus areas, all of which are high-growth opportunities, including: hybrid cloud, digital workplace, security and resiliency, and artificial intelligence (AI).

It became the world’s largest IT infrastructure services provider overnight, valued at $19 billion. “This is not a business that IBM really invested in,” said Kyndryl’s CEO Martin Schroeter at the time. “I think that their point of view was, without investment, it’ll never turn around, and therefore it’s always going to be one to two points of drag on IBM’s revenue growth.”

Prior to trading as an independent company on the New York Stock Exchange, Kyndryl had three consecutive years of revenue decline and a net loss of $2.01 billion in 2020. We have a revenue growth problem, and we have a profitability problem,” Schroeter said. “We think we can work on both of those simultaneously.”

One year on, Clara Belalcazar, the firm’s Chief Marketing Officer for the Americas, tells Momentum ITSMA why account-based marketing (ABM) is helping Kyndryl boost top- and bottom-line growth.

The power of marketing

“I define myself as a technology marketer,” says Belalcazar, who worked for IBM for over 20 years before her role at Kyndryl. “Every year or two, I had a new job in a different business unit or a different product area or marketing discipline. I love learning and changing. IBM as a large corporation enabled me to experience that. I also love building new things.”

Establishing and leading the marketing efforts of the newly independent managed infrastructure services business of IBM presented the perfect opportunity (IBM retain a 19.9% share of Kyndryl).

“I lead a team of 70 very talented marketers. And I have responsibility for driving brand awareness and positioning Kyndryl as a leader, demonstrating our industry expertise. I also partner with sales to drive business growth across the US, Canada, and Latin America.”

Despite its recent financial performance, Kyndryl is equipped with market-leading talent, clients, and expertise. Its 90,000 employees have an average of 10 years’ industry experience. It boasts over 4,000 customers worldwide. According to Schroeter, its manufacturing customers make 45 percent of the world’s cars, while its banking customers represent over 60 percent of total managed assets.

“When we spun off from IBM, our mission changed. Previously, we were a captive unit that was designed to provide infrastructure services to support IBM’s products. And then when we spun off, we gained freedom of action.” Kyndryl are now actively pursuing partnerships with companies in direct competition with IBM – firms like Amazon Web Services (AWS), Microsoft, and Google. This, they say, will offer customers greater value.

Shifting focus

Belalcazar’s team is honing in on top-tier accounts. “We are trying to understand their business, their industries and what they need to achieve. We’re using a combination of industry marketing account-based marketing to be able to deliver and help sales drive growth.”

This represents a big shift from pre-spin-off days. “We were previously targeting a broad market segment, focused on filling the funnel and driving marketing qualified leads. But for a services business where we have these very complex deals, 200-day sales cycles, and where relationships and trust are key, this wasn’t the best model.”

Two months before it officially separated from IBM, Kyndryl did a ‘soft spin’. “We started focusing on a narrower set of customers because we wanted to align to what mattered most to our customers. Then, as we progressed, we saw that it was important for Kyndryl to focus on a very specific set of accounts – 100 in the US.” To do that, they needed more than industry marketing. They needed ABM.

Happy customers

Belalcazar says it was an interesting shift from doing marketing to “fill the funnel” and generate marketing qualified leads (MQLs). “For example, when we did events in the past, we wanted to get as many people as we could coming to our booth and engaging there. We’d go back and report on the thousands that came.” Now they are focused on who from their target accounts is attending and how they can help their sellers build relationships with those people. It must be working: “In the months we’ve been running Kyndryl, sales haven’t come to me asking ‘where are my MQLs Clara?’ They’re very happy with what we’re doing.”

Much of this comes down to having the right team with the right resources and mindset. While 70-80% of the team comes from IBM, Kyndryl was selective about who it poached. “We were looking for people that were passionate, that were extremely resilient, and entrepreneurial. Of course, we wanted the right skills. But more important was attitude and passion.”

The future seems bright for IBM’s former managed infrastructure services business. But as Belalcazar admits, it’s too soon to say if Kyndryl’s fortunes will have changed completely. “We have been making adjustments as we go. The fact that we are iterating and improving all the time has enabled us not to make major mistakes or implement things we then regret.”

To listen to the full conversation with Clara Belalcazar and find more ABM Podcast episodes featuring leaders from IBM, Fujitsu, Google, and more, click here.