CEO

Instant view: IBM CEO Palmisano will hand reins to sales chief

Reuters News
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Posted: Oct 25, 2011 5:46 PM
Instant view: IBM CEO Palmisano will hand reins to sales chief

(Reuters) - IBM CEO Sam Palmisano will hand over the reins to global sales chief Virginia Rometty from 2012, ending a near-decade-long reign during which he helped transform Big Blue from a PC hardware company into a global services behemoth.

Commentary:

TRIP CHOWDHRY, SENIOR ANALYST, GLOBAL EQUITIES RESEARCH

"I wouldn't say it's a surprise. I think this is a very good choice. Ginni has been very visible at analyst days and she is one of the most articulate speakers over the last four or five analyst days I've attended.

"If you think about where the world is going, you can have a technology or a services bend. Ginni is comprehensive about both technology and services, and that is very important.

"She has been very hands-on with the corporation and the size it has. I think she has the right strategy to lead the company for the next 10 years.

"I would say there's a huge bench in IBM. Steve Mills is a strong executive but to be CEO of IBM, you can't be a software guy and he's a software guy. The software drives IBM hardware.

"You need to understand the company's value chain and I think there couldn't be a better choice than Virginia.

"I wouldn't say I have met her one on one, but I have interacted with her at analyst says. She is the most impressive executive of all the companies I have followed, and has an aura of magnitude. In tech, you can't be just a sales person and you can't just be a services person. You have to have comprehensive experience.

"She has the skills and and she's passionate. I wouldn't consider her to be an administrator -- she is more an entrepreneur. An administrator thinks shorter-term and is focused on politics. Entrepreneurs are focused on both the short-term and the long-term and its success that motivates them, not politics."

BOB DJURDJEVIC, PRESIDENT, ANNEX RESEARCH

"It's wonderful news for IBM shareholders. She has all the smarts as any other top executive. She has something extra that is rare -- she has this spark, enthusiasm, bubbling positive energy that is catchy.

"This isn't the kind of stuff you learn at Harvard or Stanford or any other business school. You are born with it. She has that in a pleasant and unobtrusive way.

"Nothing new really. IBM is a well-oiled machine, set a new stock record for an all-time high. She just has to keep up the momentum. She, along with Sam Palmisano, are the reason that IBM is doing so well."

SUNIT GOGIA, SENIOR ANALYST, MORNINGSTAR

"She has done well at IBM. She has contributed to their expansion overseas -- emerging markets -- and has done a fantastic job in that space. All the public knowledge about her performance is very encouraging.

"Computing is an industry that is always evolving. It's moving into an era of cloud computing. The company will have to reinvent itself for the future, stay with the times and maintain the revenue base when they do that.

"It was expected. Typically their CEOs step down at 60. She was speculated to be a strong contender."

MICHAEL YOSHIKAMI, CEO, YCMNET ADVISORS

"I don't know enough about the incoming CEO. But I do know their current CEO has made the right calls in terms of moving them away from hardware and toward software and focusing on global infrastructure.

"IBM's structure is set up so that it's going to be difficult for a new CEO to come in and make a mess of it, like what happened at Hewlett Packard."

RICH SICHEL, CHIEF INVESTMENT OFFICER, PHILADELPHIA TRUST

"He may have resigned a little earlier than expected. The surprise will be probably be out of the stock tomorrow once trading gets rolling.

"The positives will carry on and there's always room for improvement."

BRAD ZELNICK, ANALYST, MACQUARIE SECURITIES

"It's largely expected that Palmisano would step down this year, just looking at the prior CEOS who all step down as they turn 60.

"In terms of Rometty, she is a logical choice. This is a non-event.

"Some view this as a disappointment for other SVPS that were in the running.

"I don't think Steve Mills will leave. It wouldn't make sense to put him in, because he too was butting up against the age boundary.

"Given Ginni's experience running the largest portion of the business by revenue, she was a logical choice."

(Reporting by Bill Rigby in Seattle and Jennifer Saba and Liana Baker in New York)