IBM's Ginni Rometty Steps Down as CEO--3rd Update

Date : 01/30/2020 @ 11:17PM
Source : Dow Jones News
Stock : Microsoft Corporation (MSFT)
Quote : 157.71  -2.52 (-1.57%) @ 12:59AM
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IBM's Ginni Rometty Steps Down as CEO--3rd Update

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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)

Copyright (c) 2020 Dow Jones & Company, Inc.

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