IBM names Rometty to replace Palmisano as CEO

The executive who built up IBM Global Services will become IBM's new CEO at the start of next year

By Marc Ferranti and Stephen Lawson, IDG News Service |  IT Management, IBM, Sam Palmisano

Virginia Rometty

New IBM CEO Virgina Rometty

Source: Flickr/Fortune Live Media

IBM has elected Virginia Rometty, a company veteran who oversaw the integration of PriceWaterhouseCoopers Consulting into IBM, as president and chief executive officer effective Jan. 1. She will replace Sam Palmisano, who will retain the chairman's role.

Rometty, who has worked at IBM for decades, most recently has been IBM senior vice president and group executive for sales, marketing and strategy.

"Ginni Rometty has successfully led several of IBM's most important businesses over the past decade -- from the formation of IBM Global Business Services to the build-out of our Growth Markets Unit," Palmisano said in a statement. "With every leadership role, she has strengthened our ability to integrate IBM's capabilities for our clients."

Rometty's work integrating PwC and building a global team of more than 100,000 consultants, as well as other roles she has held at the company, have made her a driving force for IBM's Smarter Planet strategy, according to IDC analyst Frank Gens. Smarter Planet is focused on using technology to transform businesses, governments and industries.

"I think that their strategy has proven to be a very strong one," Gens said. "She represents continuity of strategy."

Rometty has a good understanding of IBM's software, services and hardware business, and customers shouldn't expect any major changes with the new leadership, said analyst Chris Foster of Technology Business Research.

"The company is strongly run on process, so the process won't change," Foster said.

If anything, Rometty may be better than Palmisano at engaging customers, because she has a reputation for making customers feel involved, Foster said.

Under Palmisano, who became CEO in 2002 and chairman of the board in 2003, IBM sold its PC business to Lenovo, sharpened its focus on services and expanded into emerging markets including China, India, Brazil and Russia.

IBM, with its broad portfolio of corporate-focused products, is a major barometer of enterprise IT.

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