Rometty Slides Smoothly Into IBM’s Driver Seat

IBM named Virginia Rometty as the company’s first-ever female CEO Tuesday as Sam Palmisano stepped down from his nearly decade-long tenure.

Since Palmisano took over in 2002, the CEO oversaw a transition that included selling its PC business, buying PricewaterhouseCoopers Consulting and making more than US$25 billion worth of software acquisitions to keep IBM an industry giant.

“They started this transition when Sam cam in in 2002, and it wasn’t until 2007 that they really hit their stride. They’ve put out their road maps for the future, and we’ve seen that investors believe the company is in pretty good shape. There’s a high level of confidence,” Louis Miscioscia, senior analyst at Collins Stewart, told the E-Commerce Times.

Palmisano will remain chairman. Though he turned 60 earlier this year, his sudden semi-retirement was somewhat unexpected — when asked by The Wall Street Journal last year, he said he wasn’t going anywhere. IBM didn’t respond to the E-Commerce Times’ requests for comment.

New Sales Leader

Rometty comes from IBM’s sales and marketing sector, where the 54-year-old took charge of revenue, profit and client satisfaction sprawling across the company’s 170 global markets.

In her 30 years at IBM, she has filled many positions and has reportedly long been groomed for an eventual top leadership role. She’s been credited as an essential factor in the $3.9 billion PwC Consulting acquisition, fighting on the side of consultants to make sure perks such as their travel budgets weren’t slashed.

Smooth Sailing

Unlike some of the more recent corporate transitions within tech giants — for example, Carol Bartz’s turbulent departure from Yahoo and the firing of Leo Apotheker as leader of HP — IBM’s CEO transition promises to be relatively smooth. Rometty indicated Tuesday she intends to keep the company headed in the same direction.

“The simple answer is, this isn’t going to result in big changes. Her comments showed she believes that the company Palmisano put on track is on the right course,” said Miscioscia.

That’s not to say the company is stagnant. IBM traditionally operates according to a five-year plan, and it’s been able to anticipate market changes and stay ahead of competitors.

“The company has done extremely well under Palmisano’s leadership, if you look at not just where IBM is going, but competitors like Oracle and HP, in essence what they’re trying to do is refashion themselves in IBM’s image. It’s reasonable to say the business model that IBM has pursued under Palmisano’s model hasn’t just been very successful and sustainable from a business standpoint, but also come to define the model of choice for enterprise-focused vendors,” Charles King, principal at Pund-IT, told the E-Commerce Times.

One area of interest for IBM in the future will be to adopt more cloud-based computing and analytics, though in the short term Rometty isn’t likely to shake anything up upon taking over.

“I wouldn’t expect to see any major chances in the next three to four years. After that, like any vendor, IBM is keeping its finger in the wind and eye on the market to see what things are changing. Over the last 10 to 15 years they’ve been very good at anticipating where the market was headed and aligning themselves to it. I’d expect Rometty to keep that course,” said King.

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