01 Feb Rometty stepping down as IBM’s CEO
There’s about to be a new face at the helm of Big Blue now that Ginni Rometty is stepping down as CEO after four decades with the company.Arvind Krishna, who leads IBM’s cloud computing business, will take over as CEO on April 6. Rometty was named chairwoman, president and CEO in 2012. Rometty will continue in her role as chairman for the rest of this year before retiring completely.
During her IBM tenure, Rometty was one of the most prominent female executives in the corporate world, but she struggled at times in transitioning IBM from a hardware company—think mainframes—into a new business with verticals such as cloud, artificial intelligence, blockchain and data analytics.
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While Rometty, 62, was largely successful in turning IBM into a more nimble company, IBM in general hasn’t been a standout on Wall Street as its shares generally trended lower as the stock market rose over the years. During Rometty’s tenure, IBM’s stock has dropped about 26% while the S&P 500 has grown 160%.
“Ginni has provided outstanding leadership for IBM, substantially transforming the company and ushering in a new cloud and cognitive era,” said Michael Eskew, lead director of the IBM board of directors, in a statement. “She has taken bold strategic actions to reposition IBM for the future, shedding businesses and growing new units organically and through acquisition, all while achieving record diversity and employee engagement and setting the industry standard for responsible technology ethics and data stewardship.”
RELATED: IBM wraps up $34B deal to buy Red Hat
Under Rometty’s leadership, IBM bought open source vendor Red Hat for $34 billion last year. As part of that deal, Red Hat CEO James Whitehurst came over to IBM. On Thursday IBM announced Whitehurst was named president, which is also effective April 6.
“Rometty did her landmark deal with Red Hat,” said Scott Raynovich, founder and chief analyst of Futuriom. “That will be her legacy. It’s now up to Krishna to steer IBM into more of a leadership position in Cloud.”
During Rometty’s years as CEO, IBM bought 65 companies, and sold off companies that accounted for $9 billion in yearly revenue, including semiconductor manufacturing and software businesses. She also reinvented more than 50% of IBM’s current portfolio and built a $21 billion hybrid cloud business, according to IBM.
In its press release, IBM talked up Krishna’s experience, including his role as a “principal architect” in the Red Hat deal. Krishna, who currently holds the title of senior vice president for cloud and cognitive software, joined IBM in 1990. Krishna brings a long track record as a technologist to his new role as CEO. Previously, he was general manager of IBM’s systems and technology Group’s development and manufacturing organization. Prior to that Krishna built and led many of IBM’s data-related businesses.
“Arvind is the right CEO for the next era at IBM,” said Rometty, in a statement. “He is a brilliant technologist who has played a significant role in developing our key technologies such as artificial intelligence, cloud, quantum computing and blockchain. He is also a superb operational leader, able to win today while building the business of tomorrow… He is well-positioned to lead IBM and its clients into the cloud and cognitive era.”
Over the past year, IBM has been able to rack up several customer wins in the service provider sector, including a $550 million deal with U.K.-based Vodafone Business and a deal with AT&T Business.
In November, IBM announced it had it designed a financial services-ready public cloud by collaborating with Bank of America. Last Friday Cisco and IBM announced a with new managed private cloud-as-a-service for x86 hardware that’s powered by Cisco’s Unified Computing System (UCS.)
Wall Street reacted positively to the leadership shakeup at IBM. Big Blue’s stock was trading at around $143 per share mid-Friday morning after closing at $136.77.