News

Virginia Rometty To Take Top Spot at Big Blue

Thirty-year IBM veteran expected to follow the strategies set by Palmisano, who remains as chairman.

• By Jeffrey Schwartz
• November 27, 2011

When Virginia Rometty takes over as president and CEO of IBM Corp. next month, it will mark a rare changing of the guard at one of the largest and oldest companies in the IT industry. Rometty, known as "Ginni" by colleagues, will take the reins from Samuel Palmisano, who served as CEO for a decade. Palmisano will remain chairman.

Rometty, who has a degree in computer science and electrical engineering from Northwestern University, joined IBM in 1981 as a systems engineer and worked her way through the ranks.

She has held numerous managerial positions and is currently senior vice president and group executive for Sales, Marketing and Strategy, where she's responsible for IBM's worldwide revenues, which topped $99 billion last year. Prior to that, she oversaw key IBM businesses, including the launch of the company's Global Business Services and Growth Markets Unit.

Rometty takes over just months after IBM celebrated its 100th anniversary. Departing chief Palmisano is said to have been grooming Rometty to take over as CEO of IBM for some time, which made her the odds-on favorite for the job when he decided to step down.

"She is more than a superb operational executive," Palmisano said in a statement. "With every leadership role, she has strengthened our ability to integrate IBM's capabilities for our clients. She has spurred us to keep pace with the needs and aspirations of our clients by deepening our expertise and industry knowledge. Ginni's long-term strategic thinking and client focus are seen in our growth initiatives, from cloud computing and analytics to the commercialization of Watson. She brings to the role of CEO a unique combination of vision, client focus, unrelenting drive, and passion for IBMers and the company's future. I know the board agrees with me that Ginni is the ideal CEO to lead IBM into its second century."

Rometty is the first woman to lead IBM and her appointment comes just more than a month after Hewlett-Packard Co. appointed Meg Whitman as its CEO, after cutting loose Leo Apotheker, whose tenure lasted only 11 months. While HP is larger than IBM in terms of revenues, Big Blue has a larger footprint in the enterprise and has experienced less turmoil over the past decade.

"There's no greater privilege in business than to be asked to lead IBM, especially at this moment," Rometty said in a statement. At the same time, she suggested that she plans no immediate shifts in strategy: "Today, IBM's strategies and business model are correct. Our ability to execute and deliver consistent results for clients and shareholders is strong."

Indeed, as head of IBM's worldwide salesforce, Rometty was essentially responsible for the company's revenues and client relationships. "Rometty's list of accomplishments at the company is impressive by any measure but what it essentially translates to is a tangible, deep understanding of IBM's massive global business and its corporate culture, making her intimately acquainted with the company-wide integration strategy underlying its core solutions, service offerings and relationships," said Pund-IT analyst Charles King in a research note.

Rometty's short-term challenges will be in executing IBM's existing strategies, King noted. At the same time, Rometty takes over during a period when she will have to guide the company through key changes in IT: Chiefly, the growing importance of cloud computing and helping customers mine ever-growing mounds of data. Both are areas where IBM has made huge investments.

Among other challenges are uncertainties in the economy and projections for lower IT spending growth.

Palmisano finishes a decade-long reign at IBM that was underscored by a period of spectacular growth for the company despite a tailspin in the economy. As CEO, Palmisano made some big bets, including the divestiture of the company's PC, printing and disk drive businesses and a shift to enterprise software and services, while also maintaining steady growth in its hardware and mainframe businesses.

He engineered the $3.5 billion acquisition of PriceWatherhouseCoopers Consulting, propelling IBM's emphasis on IT and business consulting and services. Rometty played a key role in overseeing the integration of that acquisition.