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Palmisano's deserving successor

Wednesday 26th October 2011
Samuel J Palmisano and Virginia M "Ginni" Rometty at IBM's corporate HQ in Armonk, New York. http://www.ibm.com/ibm/sjp/announcement.html

Virginia M. Rometty, 58 and senior vice president at IBM will be the company’s next CEO, the directors have announced. She will succeed Samuel J Palmisano, 60, who will remain as chairman, at the start of next year.

Ms. Rometty well known in the technology industry has led strategically important divisions as IBM moved to services and products with high profit margins, like the software. The directors’ choice of  Rometty, ends a competition that has been under way for years to find the lead to succeed the redoubtable Palmisano.

Analysts reports Steve Lohr in the New York Times say the senior VP who led IBM's highly profitableand growing software division, Steven A. Mills  (right) has a 60 age obstacle the traditional retirement age for IBM chief executives, although Palmisano singles him out for praise as doing "a phenomenal job."

Picking Rometty to head IBM,  makes her one of the most prominent women executives in corporate America, joining  Ursula Burns of Xerox; Indra Nooyi of PepsiCo; Ellen J. Kullman of DuPont and HP's Meg Whitman.

But gender did not figure into Ms. Rometty’s selection. According to Palmisano, “Ginni got it because she deserved it. It’s got zero to do with progressive social policies,” he added.

Rometty has led the growth and development IBM services business for more than ten years.. The services strategy is a marketing strategy say analysts that bundles together technology to help business streamline operations, find customers and develop new products.

Rometty with a degree in computer sciences joined IBM in 1981 as a systems engineer. In 2002, she championed the purchase of PricewaterhouseCoopers Consulting, for $3.5bn, a deal made shortly after Palmisano became CEO, and seen as a big risk.

PricewaterhouseCoopers consultants were used to operating independently in a very different culture from the regimented IBM and the risk was the consultants would depart leaving a shell business. But Rometty coordinated the work between the consultants and IBM technologies and made it work with a combination of "performance and charisma."

In 2009, she became senior VP and group executive for sales, marketing and strategy. leading IBM to sharply increase business in China, India, Brazil and emerging markets, including several African nations that now account for 23% of IBM revenue, up from 20% when she took over and projected to reach 30% by 2015.

The CEO and top marketing job means spotting opportunities to use IBM labs science in new products and services. “It’s not about capturing markets, it’s about making new markets,” she is quoted saying.

Palmisano succeeded Louis V. Gerstner, inheriting a healthy company  but one,  as ever,  in need of transformation. In Palmisano's reign, IBM sold the PC , printer and hard disk drives business to focus on software and services primarily to business and governments.

In 2008, he launched IBM's Smarter Planet strategy, which describes the company's view of the next era of information technology and its impact on business and society. In 2011, IBM overtook Microsoft, to second place as most valuable technology company after Apple.

Rometty looks to be more than capable of running the "distance run." 

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