CNNMoney: IBM CEO Palmisano to step down

October 25 2011

The headline is a little mis-leading, since Palmisano remains as Chairman, but Ginni Rometty moves up to CEO and President, as announced today by IBM.

What I like about this article is this:

Palmisano's tenure was an extremely successful one: After taking the tech giant's reins from Lou Gerstner in 2002, Palmisano transformed the company from a systems and services firm into a supercomputing and analytics mega-machine.

The makeover paid off. Shares have soared 73% during Palmisano's tenure and IBM's revenues have more than quadrupled in his nearly 10 years at the helm.
This is the big picture, my friends. You may complain about IBM marketing or individual products or competitive positioning, but in the last decade, IBM has grown 4x and its value to shareholders has nearly doubled. While Palmisano has never sought the limelight in a Ballmer or Ellison kind of way, he has truly been a visionary and leader in shaping the present and future of IBM.

I met Ginni Rometty at my new executive brainwashing training class three years ago. She was the most-senior executive to come address our class, but she spent very little time presenting. Most of her time with us, the future leaders of IBM, was in Q&A format, with open and honest answers. Rometti saw the challenges, understood the markets, and had a vision of where to go. That's why it is no surprise that she says today,
Sam taught us, above all, that we must never stop reinventing IBM.
After more than 17 years here, I have never been more excited about what happens next at IBM. The combination of Palmisano and Rometty in the executive office seems like a dream team to this product line executive. It won't be long before we know what IBM's next century stands for.

Link: CNNMoney: IBM CEO Palmisano to step down >

Ed Brill | Highland Park, IL USA Category:  IBM  Add/View Comments [18]

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  1. 1  anna  | 10/25/2011 5:20:20 PM

    Well said.

  1. 2  Nathan T. Freeman http://ntf.gbs.com | 10/25/2011 6:39:39 PM

    Ed, do you have any reason to believe that Ginni might be more outspoken a leader than Sam was? I understand it's not the typical IBM way, but it would interesting to have a more "out front" CEO like Jobs or Ellison. Just wondering if that could be an aspect of "reinventing IBM."

  1. 3  Debbie  | 10/25/2011 6:40:38 PM

    Ed, thank you for sharing your insights and your first hand experience with Ginni. I agree with you wholeheartedly regarding IBM as a company on the whole. In specific pockets, we'll never please everyone. We must be doing something right, though; because, in this tough economic environment IBM, together with our Business Partners, have really made the company an excellent investment for employees, partners and shareholders. I'm very proud to be an IBMer!

  1. 4  Ed Brill http://Www.edbrill.com | 10/25/2011 7:29:27 PM

    @2 it is a good question. I think the answer is yes, but I also think with a portfolio business, it is hard for the chief executive to stand for much more than a vision in public. She can't have transient messages, they have to be enduring, long-term, high-level. Rometti's background is more on the sales side, which often wires people (like me) to continue to seek audience with customers and the market whenever possible.

  1. 5  Phil Salm  | 10/25/2011 9:55:37 PM

    I am impressed by everything I've read so far about Ginni Rometty, and am looking forward to seeing the direction she moves IBM going forward. As a father of 3 daughters, I'm also excited every time I see more doors open for women, and the promise that holds for my daughters' future.

    That said, it is simply false to conclude that the positive results of IBM shares and revenue growth over the last decade indicate that there is nothing wrong with IBM marketing of ICS/Lotus, or its competitive positioning of ICS/Lotus.

    While I'm happy for IBM shareholders and the wealth they've accumulated, the results of ICS/Lotus do not parallel IBM's overall success. And that, my friend, is the small picture that we in this sub-community inhabit.

  1. 6  Nathan T. Freeman http://ntf.gbs.com | 10/25/2011 10:45:31 PM

    @5 That's a good point. One of the most interesting things that Ginni could do from a leadership standpoint is to set dramatically more aggressive targets for the Software Group. Time and again we hear that ICS meets it's growth targets (pre-global recession, of course!) and therefore there's no push from IBM corporate for a change. With Sam having set the goal for IBM Software to represent 50% of overall revenue by 2015, will Ginni come in and insist on truly aggressive growth targets for the software groups that draw attention to the strong competition, instead of soft targets that under-target the growth of marketSHARE vs. market?

    That would be cool. I would adore a CEO that insistent on being the leader in share in every market for IBM software. Or even a Jack Welsh philosophy of "top 2" as long as it's measured by people instead of revenue.

  1. 7  Ed Brill http://www.edbrill.com | 10/25/2011 10:58:36 PM

    Phil, my post is meant to convey a sense of the big picture. That is, after all, why IBM is in business, right? To generate profits for IBM shareholders and do so in a way that benefits our clients and partners?

    I never asserted "that there is nothing wrong". I asked only that you look at the big picture in the context of those complaints.

    I have to be careful here because I can't discuss specifics of our financials externally. But I can point to a few things. All three quarters of 2011, Lotus branded software has grown on a year to year basis. The Q3 report was seemingly ignored in the community, perhaps because it is now again routine for growth for Lotus. (BTW, the same basket of software is reported under that "Lotus branded" banner now as was true a year ago). So I find it hard to understand your assertion that our results "do not parallel IBM's overall success".

    Put one more way, as the article states, modern IBM clearly has a history of retiring or jettisoning unsuccessful areas. We have shipped new features in Notes/Domino every year since 2002, built whole new categories of capability in the product line with XPages and LotusLive Notes, extended it with Traveler, and introduced new market segmentation through XWork Server. Would all of this be happening if Notes/Domino was somehow viewed as unsuccessful/no longer successful? I don't see this level of sophistication coming out of my competitors.

    There is always room for improvement. Sometimes improvement in the IBM machine is weighed in terms of profit, shareholder value, and return on investment, other times in terms of opportunity or future potential. That is why we can't do everything we are asked, any more than you can in your company or any reader's organization. I show up every day, travel around the world, have a staff of dedicated people, all committed to doing the best we can for and within our business every day. I know you know that. And I know that all of that makes sense in the context of how IBM is successful today.

  1. 8  Ed Brill http://www.edbrill.com | 10/25/2011 11:00:00 PM

    @6 what is "people instead of revenue" as a measurement? I don't understand what you mean. IBM are either #1 or #2 in almost every major software market we compete in. It is a core objective today.

  1. 9  Richard  | 10/26/2011 2:28:39 AM

    Hi Ed,

    I am looking at the enterprise collaboration market and pretty well all I am seeing is Sharepoint. The last time I personally witnessed such a feeding frenzy was over 10 years ago in SAP. I would love to think this new appointment would be good for you guys.

  1. 10  Dwain A Wuerfel  | 10/26/2011 8:20:01 AM

    Can we all agree that being a CEO is no easy task? There job in most organizations is having to please shareholders, employees, and those of us that love our product. The employees and those of us that love the product have a hard time understanding why IBM doesn't market aggressively and I am guessing most shareholders wonder why IBM continues with a product line when most of the news articles they hear and see are about the GSA moving from Lotus Notes to Google or the University of Nebraska moving from Lotus Notes to Sharepoint.

    Maybe all parties could be satisfied if the CEO could make it known that IBM is going to stand behind the software line and continue developing Lotus Notes and vigorously fight to regain the market share we have lost to Microsoft Sharepoint and Google.

    This should be done with better marketing and not low balling a bid. I say this because our company has stood its ground over the years when price wars occurred and our competitors low balled a bid because we know our product is superior and the clients will soon realize the same and come back begging.

    Dwain A Wuerfel

  1. 11  Christopher Byrne  | 10/26/2011 3:28:17 PM

    What impressed me most from the articles I read on her selection is how she went to bat for her people when PwC was being integrated into IGS. The battle she chose to fight is one that could easily have derailed her career if she had lost. Bur she stuck to her guns and won. That is the sign of a true leader.

  1. 12  Christopher Byrne  | 10/26/2011 3:28:47 PM

    PwC Consulting that is.

  1. 13  Bill Geimer  | 10/26/2011 10:22:41 PM

    @10 I have seen many more Outlook shops move to Google than Notes shops, but almost every one migrated for budget reasons, not technology. And as most of the budget savings was headcount, most Outlook shops saved more, if they are staffed normatively. As for Nebraska, they were more ofen in the new for moving to the Big 10, the conference that cannot count.

    I and my stock holdings have high hopes for a long and happy turn for Ginni Rometti at the IBM helm.

  1. 14  Randall Shimizu  | 11/7/2011 12:54:44 AM

    I am sad to see Sam Palmisano go. Sam Palmisano is probably one of IBM's greatest visionaries in my lifetime. I am hopeful however that Ginni Rometty will have a much more aggressive marketing strategy and is willing apply those resources when needed.