IBM’s Great Revival Is Underway, Arvind Krishna Takes The Reins

When she first started as CEO, Virginia Rometty had grand plans to herald in IBM’s glorious future as a hybrid cloud powerhouse. Unfortunately, competitors like Amazon and Microsoft's Azure threw Big Blue a curveball, and they lost the advantage. It wasn’t all bad news, however. IBM’s head of cloud and cognitive software department Arvind Krishna pulled off the cloud coup of the decade when he spearheaded the acquisition of open-source software company, Red Hat, for $34 billion. It was a daring plan and one that should play a role in getting IBM back on the cloud computing track. 

Nevertheless, no multi-billion deed goes unnoticed, and Arvind Krishna will become chief executive officer role after Rometty steps down from the senior leadership role. Analysts received the news positively, Wedbush analyst Moshe Katri stated the report was a "welcome and overdue change. At least that's how we're looking at it – and obviously the market seems to agree."

Katri was referring to IBM’s 4.5 percent stock climb on the Friday following Thursday CEO announcement. Rometty's career at IBM spanned forty years, and while she was well-regarded by her peers, she had many challenges ahead of her when she took Big Blue's top spot in 2012. During her eight-year term, IBM's valuation dropped by 25 percent, while tech companies like Microsoft grew 500 percent.  

In addition to driving the decision to buy the cloud computing business, Krishna also was instrumental in the development of many of Big Blue’s new technologies, including artificial intelligence, cloud, and quantum computing. “He is an authentic leader who lives the values of IBM and has taken on ever-increasing responsibilities across the company,” 

Restoring IBM to its former tech glory will take a monumental effort, but many are making comparisons between the newly crowned Krishna and Microsoft's Satya Nadella. Both leaders, it's said, have a clear vision of a cloud-based future and a calm, reflective manner.  It's believed he will change the culture at IBM – one steeped in bureaucracy, tradition, and formalities – and drive innovation at a time the firm needs it most. 

The newly named IBM president, Jim Whitehurst, came to the company by way of the Red Hat acquisition. He achieved Rockstar status by taking the company's total revenues from approximately $500 million to well over the billion-dollar mark at the end of the 2012 fiscal year. When IBM made its intent known to acquire the open-source software provider in 2018, revenues had reached nearly $3 billion.  Under IBM, the firm continues to do well under Whitehurst's guidance as it reached its first billion-dollar quarter.

Analysts believe that 29-year IBM veteran Krishna and 'outsider' Whitehurst will be an exciting and complementary team. "Now the two top dogs running IBM are cloud purists," said Steve Duplessie, founder of Enterprise Strategy Group. "The old IBM died a while ago, and they had to change. This lets them remake themselves."