IBM’s shares rise on new chief executive appointment

International Business Machines named Arvind Krishna as the new chief executive, replacing the long-time executive Virginia Rometty. The shares of the company rose about 5 per cent after the announcement. Mr Krishna is currently the head of IBM’s cloud and cognitive software unit and was a principal architect of the company’s purchase of Red Hat, which was completed last year. Ms Rometty will continue as executive chairman and serve through the end of the year, when she will retire after almost 40 years with the company, IBM said in a statement. Since becoming IBM’s first female chief executive in 2012, Ms Rometty had bet the company’s future on the market for hybrid cloud, which allows businesses to store data on both private and public cloud networks run by rivals such as Amazon Web Services and Microsoft. The announcement comes as a “welcome and overdue leadership change,” said Wedbush Securities analyst Moshe Katri. “At least that’s how we’re looking at it - and obviously the market seems to agree.” Before Ms Rometty tenure, IBM’s sales had essentially been flat for six years, and the company propped up earnings per share through stock buybacks. Her boldest move came in 2018, with a $34 billion (Dh124.78bn) deal to acquire open-source software provider Red Hat. She has staked her legacy on the Red Hat purchase, a transaction meant to help save the company from irrelevancy in a business led by younger tech giants. IBM reported five consecutive quarters of negative growth after the deal’s announcement, but narrowly broke that streak in the fourth quarter of 2019, suggesting it may have finally turned the corner. Mr Krishna was the mastermind behind the Red Hat deal. He proposed the acquisition to Ms Rometty and the board, suggesting hybrid cloud is the company’s best bet for future growth. He has led the development of many of IBM’s newer technologies like artificial intelligence, cloud and quantum computing. “He is an authentic leader who lives the values of IBM and has taken on ever-increasing responsibilities across the company,” and returned IBM’s cloud and software business to growth, IBM said in the statement.

IBM’s shares rise on new chief executive appointment

Arvind Krishna was instrumental in the company’s $34bn acquisition of software company Red Hat in July last year