IBM names new CEO

Virginia Rometty to replace Sam Palmisano from January 1

IBM has named Virginia Rometty as president and chief executive officer effective from January 1, replacing Sam Palmisano, who will retain the chairman's role.

Rometty most recently has been IBM senior vice president and group executive for sales, marketing and strategy. She also oversaw the integration of PriceWaterhouseCoopers Consulting into IBM in the early 2000s. Her profile can be viewed on IBM's website.

Rometty's work integrating PwC and building a global team of more than 100,000 consultants, as well as other roles she has held at the company, have made her a driving force for IBM's Smarter Planet strategy, according to IDC analyst Frank Gens. Smarter Planet is focused on using technology to transform businesses, governments and industries.

"I think that their strategy has proven to be a very strong one," Gens said. "She represents continuity of strategy."

Rometty has a good understanding of IBM's software, services and hardware business, and customers shouldn't expect any major changes with the new leadership, said analyst Chris Foster of Technology Business Research.

"The company is strongly run on process, so the process won't change," Foster said.

If anything, Rometty may be better than Palmisano at engaging customers, because she has a reputation for making customers feel involved, Foster said.

In a statement from IBM announcing the appointment, Palmisano says: "Ginni Rometty has successfully led several of IBM's most important businesses over the past decade -- from the formation of IBM Global Business Services to the build-out of our Growth Markets Unit," Palmisano said in a statement. "With every leadership role, she has strengthened our ability to integrate IBM's capabilities for our clients."

Under Palmisano, who became CEO in 2002 and chairman of the board in 2003, IBM sold its PC business to Lenovo, sharpened its focus on services and expanded into emerging markets including China, India, Brazil and Russia.

IBM last week announced increases in sales and profit for the quarter ending in September, though revenue fell slightly short of analyst expectations. IBM quarterly profit rose year over year by 7 percent to US$3.8 billion, while sales were up 8 percent to $26.16 billion. Bright spots included software revenue, up by 13 percent to $5.8 billion; Power Systems revenue, up by 15 percent; and cloud-oriented technology sales, which doubled from last year.

"Sam had the courage to transform the company based on his belief that computing technology, our industry, even world economies would shift in historic ways," Rometty said in a statement. "Today, IBM's strategies and business model are correct. Our ability to execute and deliver consistent results for clients and shareholders is strong."

Despite concerns over sales, IBM last week displayed confidence in its ability to navigate a tough economic climate, raising earnings expectations for fiscal 2011 to at least $13.35 per share from $13.25.

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