IBM's Ginni Rometty Steps Down as CEO--3rd Update
January 30 2020 - 6:17PM
Dow Jones News
By Asa Fitch
International Business Machines Corp. said Chief Executive Ginni
Rometty is stepping down after a difficult eight-year run at the
top of the iconic technology company as she struggled to deliver
growth at a time other tech giants' fortunes blossomed.
Ms. Rometty, 62 years old, will formally step down on April 6.
She will be replaced by Arvind Krishna, who heads the company's
cloud and cognitive software division, the company said on
Thursday. Jim Whitehurst -- the chief executive of Red Hat, the
open-source software giant that IBM acquired for approximately $33
billion last year -- was appointed the company's president.
Ms. Rometty will continue as the company's board chairman
through the end of the year, at which time she will retire after
almost four decades with Big Blue, the company said. Ms. Rometty
has been one of the most high-profile female CEOs in business,
where the top ranks are still male dominated.
IBM shares rose more than 3% in aftermarket trading following
the announcement.
The new leadership appointments highlight how IBM is betting its
future on the booming cloud-computing field, where it has lagged
behind rivals such as Amazon.com Inc. and Microsoft Corp. IBM built
its success on providing technology to other companies. But IBM was
slow to adapt as corporations shifted from storing data on big
servers they owned to renting that computing capacity from service
providers, so-called cloud-computing.
Ms. Rometty in recent years has emphasized IBM would become a
forceful competitor in cloud-computing, but Big Blue still trails
its main rivals in cloud sales. IBM is the fifth-largest public
cloud infrastructure provider, according to research firm Gartner
Inc., with less than 2% market share.
Ms. Rometty has tried to jump-start cloud growth, largely with
the Red Hat, the largest acquisition in IBM's 108-year history. The
deal closed last year.
Mr. Krishna, 57 years old, played a leading role in IBM's
acquisition of Red Hat. He joined the company in 1990 and studied
at the Indian Institute of Technology, Kampur and received an
electrical engineering doctorate from the University of Illinois at
Urbana-Champaign.
Ms. Rometty took over as IBM CEO in 2012 at a difficult time for
Big Blue. IBM sales fell year-over-year in Ms. Rometty's first 22
quarters in a row. After a brief three-quarter period of rising
sales, they fell again for another six quarters. Sales rose in the
latest quarter.
A native of Chicago, Ms. Rometty rose up IBM's ranks as an
executive in its fast-growing services division in the 1990s under
CEO Lou Gerstner, who revived the company by shunning low-margin
hardware sales and focusing on IT services and outsourcing. She
made her mark under its next CEO, Sam Palmisano, by leading the
integration of the consulting arm of PriceWaterhouseCoopers LLP,
which IBM bought for $3.5 billion for in 2002.
Write to Asa Fitch at asa.fitch@wsj.com
(END) Dow Jones Newswires
January 30, 2020 18:02 ET (23:02 GMT)
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