I.B.M. Names Virginia Rometty as New Chief Executive

The New York Times, by STEVE LOHR, October 25, 2011

Virginia M. Rometty, 54, will succeed Samuel J. Palmisano as the next
chief executive of I.B.M. at the start of next year.

Virginia M. Rometty, a senior vice president at I.B.M., will be the company’s next chief executive, the directors announced on Tuesday. She will succeed Samuel J. Palmisano, who will remain as chairman, at the start of next year.

Ms. Rometty, 54, is well known within the technology industry, but not widely beyond. She has led strategically important sectors of the company as it has shifted to services and analytic software.

The board choice of Ms. Rometty, who managed an important merger as well as sales in important new markets, ends a competition that has been under way for years. The leading candidates were always from within the company’s executive ranks.

A leading rival to succeed Mr. Palmisano, analysts say, was Steven A. Mills, the senior vice president who led I.B.M.’s highly profitable and growing software division. But Mr. Mills’ age, analysts say, was likely an obstacle. Mr. Mills has just turned 60, the traditional retirement age for I.B.M. chief executives.

 Mr. Palmisano, in an interview Tuesday, singled out Mr. Mills for praise, saying “he’s done a phenomenal job.”

The selection of Ms. Rometty for the top job at I.B.M. will make her one of the highest-profile women executives in corporate America, joining a small group of women chief executives that includes Ursula Burns of Xerox, Indra Nooyi of PepsiCo, Ellen J. Kullman of DuPont and Meg Whitman of Hewlett-Packard.

Gender, according to Mr. Palmisano, did not figure into Ms. Rometty’s selection. “Ginni got it because she deserved it,” Mr. Palmisano said in an interview, using the informal first name by which she is known to friends and colleagues.

“It’s got zero to do with progressive social policies,” Mr. Palmisano added.

Ms. Rometty, who graduated from Northwestern University with a degree in computer science, joined I.B.M. in 1981 as a systems engineer. She quickly moved up to a series of management jobs, working with clients in industries including banking, insurance, telecommunications, manufacturing and health care.

For much of the last decade, Ms. Rometty has led the growth and development of I.B.M.’s huge services business. She championed the purchase of the big business consulting firm, PricewaterhouseCoopers Consulting, for $3.5 billion in 2002. Ms. Rometty was then put in charge of coordinating the work of the acquired firm’s consultants with I.B.M.’s technologists, to tailor services and software offering for specific industries. “She did the deal, and she made it work,” Mr. Palmisano said.

In 2009, Ms. Rometty became senior vice president and group executive for sales, marketing and strategy. Part of the job is leading the I.B.M. drive to sharply increase its business in overseas growth markets, like China, India, Brazil and dozens of emerging markets, including several African nations. Such markets now account for 23 percent of I.B.M.’s revenue, and should reach 30 percent by 2015, the company projects.

Mr. Rometty’s top marketing job includes spotting opportunities to use the science coming out of I.B.M.’s labs in new products and services. For example, Ms. Rometty has pushed to expand the company’s fast-growing analytics unit, which uses clever software to sift through the vast amounts of data inside companies, on the Web and social networks, to help clients look for sales and cost-saving opportunities.

“It’s not about capturing markets, it’s about making new markets,” Ms. Rometty said in a brief interview.

Mr. Palmisano turned 60 in July.

Under Mr. Palmisano, who became chief executive in 2002, I.B.M. sold its personal computer and some other hardware lines, and focused increasingly on services and software. I.B.M. sells mainly to business and governments, leaving consumer technology to others.

The formula has proved successful. The company’s profits have increased sharply since Mr. Palmisano took over, and its stock price climbed steadily. Earlier this year, I.B.M. passed Microsoft to become the second most valuable technology company, measured by market capitalization, trailing only Apple, the consumer technology powerhouse.

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