Kyndryl’s strategic focus on hyperscalers and embracing OEMs to meet market demand

Kyndryl is honing its partnerships with major hyperscalers while also expanding its vendor alliance base to include more original equipment manufacturers (OEM).

This is according to the the global IT services firm’s Australia and New Zealand (A/NZ) head of strategic partnerships and alliances, Kimberley Marlay, who has been with Kyndryl since it split from IBM in 2021 but entered her current role in November last year.

She said the firm’s current strategy involves tapping into its hyperscaler partners — Microsoft, Amazon Web Services (AWS) and Google — to fit in with major industry movements.

An example of this strategy in action, Marlay continued, is Broadcom’s acquisition of VMware and the resulting ripple effect for Kyndryl’s customers.

“That’s causing a lot of momentum around lift and shift. So, hyperscalers play a massive part in that conversation,” she said.

“For me, it’s really fortunate timing, because we have serious skills in the VMware space.”

Marlay claimed that Kyndryl is VMware’s biggest global customer, with the firm managing about 750,000 cores around the technology for its customers and, as such, acutely understands “the pain of what’s going on at the moment”.

“For me, it was really easy to step in, understand that macro trend and having all of those hyperscale platforms for our customers to move on to,” she said.

“[There’s] not very many opportunities when that happens in an industry where everyone’s doing the same thing, so you can replicate and move pretty quickly with a squad of people that can do it very well.”

The emphasis on macro trends comes in, according to Marlay, as “ultimately it’s up to the market to define the strategy that they are going after”.

“From my perspective, VMware is a no brainer, because we have a lot of those skills in market,” she said.

How Kyndryl utilises hyperscalers is all a matter of what direction its customers want to move in and which one they wants to work with. 

“When we look at all of the hyperscalers, it really is down to strategic account planning, because we don’t decide which one we’re going to partner with based on a particular play. It really comes down to who the customer has selected as their key cloud provider,” she said.

This is particularly relevant when it comes to working with customers in the financial industry, Marlay continued, with an AWS solution working for mission critical functionality in some instances, while a Microsoft product could work in others.

“We do have to partner one-on-one at the account level to identify where we want to play with each other because it’s a crowded space and we all have our skillsets that we bring to bear,” she said.

“So, it’s really about mapping that out and working out the right work streams for the right accounts.”

Marlay pointed out its preference to work with organisations it has the most mature relationship with and in this case, Microsoft was its first partner after spinning off from IBM.

“We’re probably a little bit further along in the way that we plan and go to market from a joint value proposition perspective,” she said.

“Second was AWS and we have a great alignment with them from particularly from a state and federal government perspective.

“Then there’s Google, who’s probably more in the mid-market space in Australia and New Zealand.”

Embracing OEMs

At the organisational level, Kyndryl’s focus is on the hyperscalers first and foremost. Meanwhile, OEMs weren’t considered a priority until recently.

“We focused very much on the hyper scalers to start with. So much so that everyone else, which we put in an OEM space, were deselected, because we said, ‘We’ve got to focus on our profit, because we’re going to turn around our investors’ perspective of who we are as an organisation,’” Marlay said.

Marlay said once it sorted its hyperscaler strategy, the next move was focused on revenue and building for the future. This is where Kyndryl began opening up to OEMs in its alliance’s portfolio.

Marlay said the decision not to embrace OEMs sooner was, arguably, “to our detriment”.

“What we’ve discovered is being that OEM provider meant that you could actually be a lot of a more holistic partner for the customer,” she said.

“That has gotten going quite quickly, more than we expected – more than we’ve got a team to manage, to be honest.”

Kyndryl divides its practices into six segments: apps, data and AI, core enterprise and zCloud, network and edge, cloud, security and resiliency and digital workplace, with each segment working with various vendors – around four or five – and building a joint proposition to meet market demand.

Marlay then meets with the practice leaders to determine which vendors they intend to develop their plan around, working out a strategy to build up that partnership.

“There’s quite a bit going on … but it’s also ramping up, as opposed to what we were focusing on in the first three years of being Kyndryl,” she said.

Skilling up

Helping Kyndryl’s relationships further are its mainframe skills, which stem from the firm’s work with a “significant proportion” of big banks and government organisations as it runs most of these customers’ mainframes.

“It really does put us into a great space with the hyperscalers, because our customers want to modernise off those mainframes and/or integrate with the hyperscalers’ clouds,” Marlay said.

“There are some key skills that direct us in a certain way and a lot of those hyperscaler organisations, they see those mainframes as a big opportunity for consuming cloud.

“They’re quite keen in partnering with those customers that we already have decades long relationships with.”

These skills however are at risk of leaving the industry, with Marlay claiming that there’s a block of these skilled employees retiring out of the industry, leaving a void in their absence.

“If they’re retiring out of the industry and no one’s investing in building them, that’s going to put everyone in the industry in a really tight spot if they’re not ready,” she said.

“From our perspective, we’re quite fortunate, given our heritage and where we’ve come from; we took a lot of those skills over into Kyndryl when we spun off. So, not only did we bring them with us to the organisation, we’ve really made a strategic decision to keep on building those skills for anyone that’s coming into the organisation.

“We can help to fill that gap that’s really starting to emerge in the market — more so than what we expected it to with certain data centres closing down.

“We’re trying to upskill our people where we can see the gaps emerging in the market and then, at the same time, upskilling them around the emerging technologies, not just the ones that we already have as our foundational base.”

Aside from more niche capabilities, Kyndryl has a heavy focus on developing the tried-and-true realm of cyber security skillsets, especially with the sudden rise in emerging technologies.

“The attack surface for what nefarious actors are going after has increased. So, outside the geopolitical space, and the fact that we’ve got a whole lot of defence spend going on, there’s a whole lot of modernisation going on in our technology estates,” she said. “Not just ours, across Asia Pacific, across the globe; it means the attack surface is actually more significant.

“If you couple that with the emerging technology of generative AI, it almost becomes an automated way to do cyber attacks.

“For me in the cyber space, I look at those cyber security experts as these unsung heroes, because they’re fighting a war that no one else knows about. No one else can see it, no one understands how significant it is and we actually don’t know what is required, but for us to go up against generative AI-infused cyber attacks.”

In fact, as a whole, Marlay claimed the requirement for organisations at large to develop their cyber security skills is growing exponentially, with quantum computing proving to be a powerful tool in the hands of malicious actors.

Looking to the firm’s 2026 financial year, Marlay said Kyndryl is building up its plan around industry-wide macro moments taking place in the market and guiding customers in the direction they want to move in.

“We’ve been quite lucky in the fact that we’ve entered the ecosystem in a time where there is market opportunity, we’ve got the right skills to meet that demand and we’re in a time where people are growing and they want to partner with new and different people that are thinking in different ways,” she added.