IBM is going to get a new CEO, as Virginia "Ginni" Rometty gears up to step down from her role. The company announced that Rometty will be replaced by Arvind Krishna, the head of its cloud business, as the tech giant continues to rejuvenate itself.
Alongside, Krishna, Jim Whitehurst, the former CEO of Red Hat, will become IBM's president. IBM completed its $34 billion acquisition of Red Hat in July. IBM was a late entrant in the cloud business and Krishna's elevation is likely in a bid to boost this business segment and compete more effectively with the likes of Amazon and Microsoft.
End of a long relationship
IBM in a statement said that Rometty will step down from her role and will be replaced by Krishna effective April 6, 2020. Rometty assumed the post of IBM's president and chief executive officer on January 1, 2018. Prior to that, she held the responsibility of the company's marketing, sales and strategy.
Rometty had a 40-year-long career with IBM and during her tenure as the chief executive officer the company completed as many as 65 acquisitions. Moreover, under her leadership, IBM expanded its cloud service, making it a priority, while it also disposed off a few businesses.
That said, during her tenure IBM's shares have fallen around 26%, while the S&P 500 has grown 160%. Rometty, however, will remain IBM's executive chairman till the end of this year, following which she will retire, bringing an end to a 41-year-long association with the company.
Cloud business in focus
IBM was a late entrant in the cloud business. By the time it started exploring the space, the likes of Amazon and Microsoft had already captured a large portion of the market. However, the Big Blue over the past few years has been increasingly shifting focus towards its cloud business.
Choosing Krishna to replace Rometty also looks like a strategic move given that he had been IBM's senior vice president for cloud and cognitive software for quite some time. Krishna, who is the co-author of 15 patents, played a key role in the Red Hat acquisition. He joined IBM in 1990.
Congratulating Krishna, Rometty in a statement said, "Arvind is the right CEO for the next era at IBM." It is expected that IBM under Krishna's leadership will continue to focus on its cloud and analytics space and in the process might go for a few more small and medium acquisitions.