IBM names Arvind Krishna as CEO, replaces Rometty
NEW YORK: International Business Machines Corp. (IBM) named Arvind Krishna as chief executive officer (CEO), replacing longtime CEO Virginia Rometty.
Krishna, 57, is currently the head of IBM’s cloud and cognitive software unit and was a principal architect of the company’s purchase of Red Hat, which was completed last year. Rometty, 62, will continue as executive chairman and serve through the end of the year, when she will retire after almost 40 years with the company, IBM said in a statement Thursday. The shares rose about 5% in extended trading.
Since becoming IBM’s first female CEO in 2012, Rometty had bet the company’s future on the market for hybrid cloud, which allows businesses to store data on both private and public cloud networks run by rivals such as Amazon Web Services and Micher rosoft Corp.’s Azure.
By then Big Blue, once the world leader in technology, had lagged behind competitors for years after largely missing the initial cloud revolution under
predecessor, Sam Palmisano.
The announcement comes as a “welcome and overdue leadership change,” said Wedbush Securities Inc. analyst Moshe Katri. “At least that’s how we’re looking at it -- and obviously the market seems to agree.”
Having shed its personal computer business in 2005, IBM under Palmisano struggled to position itself as a seller of highend services, like then-emerging data analytics and cloud computing. Before Rometty took over, IBM’s sales had essentially been flat for six years, and the company propped up earnings per share through stock buybacks. One of its primary ways of keeping costs in check: shifting jobs offshore, particularly to India.
Rometty embarked on ambitious plans to expand in cloud computing and artificial intelligence. She divested unprofitable businesses and bet big on an AI data-analytics tool called Watson.
Yet the efforts were stymied by the emergence of a new competitor in the delivery of computing over the internet: Amazon.com Inc. During one particularly painful several-year stretch, IBM’s sales declined for 17 quarters in a row. For its part, Watson has been faulted by customers who said it never quite lived up to the hype.
Also on Thursday, Jim Whitehurst, CEO of Red Hat, was named IBM’s new president. There had been much speculation on Wall Street that Whitehurst, 52, was in the running for the top job.