Last updated: October 26, 2011 9:22 am

IBM names Rometty as next chief executive

IBM has named Virginia Rometty to succeed Sam Palmisano as its chief executive from the start of next year, making her the first female leader in the 100-year history of the US computing giant and one of only a handful of women to head a large US corporation.

Currently head of sales, marketing and strategy, Ms Rometty is also the first head of IBM not to have run part of its traditional hardware business. At one time she headed the business services unit that accounts for around a third of IBM’s total services division, but has otherwise spent her 30-year career at the company mainly in sales and marketing roles.

In an interview, she brushed aside questions about her relative lack of broad operating management experience, adding that services now accounted for some 60 per cent of IBM’s total business. Also, having led sales in some of IBM’s main markets, she stressed her experience in packaging IBM’s range of hardware, software and services into broad solutions for its customers – that core of the approach that has seen the company rebound under Mr Palmisano to become the biggest supplier of technology to big companies and governments.

“The 15-year arc of IBM has been about services, and she’s been right in the middle of that,” said George Colony, chief executive of Forrester Research.

A close lieutenant of Mr Palmisano during his decade at the helm, Ms Rometty was instrumental in planning the 2002 acquisition of the PwC consulting business that broadened IBM’s range and added a stronger business component to its technology skills. She was also given the job of integrating the business with IBM’s other units, helping to make a success of Mr Palmisano’s riskiest corporate gamble.

“He stuck his neck out, and it was Ginni that made it work,” said Bob Djurjevic, an analyst at Annex Research.

Ms Rometty, 54, had been the favourite to succeed Mr Palmisano, who earlier this year passed 60, the normal retirement age for IBM CEOs. Other executives elevated by a management reorganisation last year into positions that made them potential successors included Steve Mills, head of software, and Mike Daniels, head of services. However, both are closer to the company’s retirement age and had been seen as less likely candidates for the CEO job.

Her appointment makes IBM the largest company with a female chief executive, ahead of PepsiCo, where Indra Nooyi has served as chief executive and president since October 2006.

Ms Rometty will now compete with Hewlett-Packard’s chief executive Meg Whitman for the unofficial title of most powerful woman in technology, continuing the bitter rivalry between the two companies. Other high-profile female chief executives in the technology and industrial sector include Ursula Burns of Xerox and Ellen Kullman of DuPont.

Ms Rometty joined IBM in 1981 as a systems engineer. She takes charge of the company as steady profit growth has lifted the value of its shares to the highest since the company went public in 1915. Earlier this year it briefly topped Microsoft to become the second most valuable technology company after Apple, capping a turnaround that began in the early 1990s after it fell behind in the early days of the PC era.

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