What you need to know about new IBM CEO Arvind Krishna

February 3, 2020, 2:00 PM UTC

IBM has a new leader, who arrives at a crucial moment, as one of the most storied corporations in America struggles to reverse years of decline. He will be expected to bandage the wounds already inflicted on Big Blue by a new generation of tech giants, and to create a largely new line of business that can return it to health.

All that, and you’ve probably never heard of him.

Exiting stage left will be Ginni Rometty. Her performance at the helm has been widely regarded as underwhelming, with profits declining by 43% over an eight-year tenure, even amidst a broader economic expansion. Her departure has been expected, and for some investors, apparently longed for: IBM’s stock rose more than 5% the day after it was announced that she was stepping down.

She will be replaced by Arvind Krishna, senior vice president and a leading architect of IBM’s cloud computing strategy. But Krishna arrives with a relatively low profile, having slowly and steadily climbed the corporate ranks.

So who is the man who will officially become CEO on April 6? Where does he come from, what skills does he bring, and, most importantly, can he turn a century-old tech firm into a leader again?

Who is Arvind Krishna?

Krishna, 57, is an IBM lifer, having joined the company in 1990 after getting an engineering PhD at the University of Illinois at Urbana-Champaign. He has been a senior vice president at IBM since 2015, and a leader in IBM’s cloud computing business since 2017.

Krishna, who was born in India, received more of the spotlight as the driving force behind IBM’s $34 billion acquisition last year of enterprise software maker Red Hat, among the largest tech deals ever. The acquisition highlighted IBM’s focus for future growth on cloud computing, the remote rental of data storage and processing power.

According to Craig Lowery, a cloud computing analyst for Gartner, Krishna’s elevation further affirms IBM’s cloud focus, as does the appointment, also on Thursday, of former Red Hat CEO Jim Whitehurst as IBM’s president.

Krishna’s long tenure in engineering distinguishes him from IBM’s previous three CEOs, who had largely non-technical careers before taking the top job. Krishna worked for more than two decades in data storage and management, and in addition to his other duties, heads IBM’s research unit.

That has drawn early comparisons to Microsoft’s appointment of Satya Nadella, a former cloud engineer, as CEO in 2014. Lowery believes IBM’s decision helps ensure that their cloud strategy is successful, since Krishna has spent his career immersed in the relevant technology.

In addition to his work on the acquisition itself, Krishna has played a major role in integrating Red Hat into IBM. At a Red Hat conference in May 2019, he spoke about his desire to preserve the free flow of ideas —and criticism—that defines engineering culture within both companies.

That also aligns with Krishna’s personality, according to Dan Ives, an analyst with Wedbush Securities. “He’s a tactician. He listens to others and he takes criticism,” he says. “He looks in the mirror, and he’s willing to see who he is and what IBM is.”

Can he fix IBM’s problems?

What IBM is, at the start of 2020, is troubled.

During her tenure, Rometty was unable to defend IBM’s position as a technology leader against industrywide change. “It’s clear that IBM was late to the cloud party,” says Lowery, giving the lead to competitors including Amazon Web Services and Microsoft’s Azure.

Though it has failed to attract many customers for its standalone cloud computing infrastructure, IBM is now focused on helping big clients connect and manage the sometimes-confusing array of cloud services they do use. The Red Hat acquisition was all about getting the technology and expertise to help clients smoothly run applications using data from, for instance, both a private cloud service from Cisco and a public cloud run by Google.

But IBM’s recent history shows that it takes more than technology to deliver results. Under Rometty, the company has put major research and development efforts into blockchain, a distributed database technology, and the Watson artificial intelligence program. But those investments have yet to produce substantial new revenue.

And there’s serious competition in helping knit together multiple cloud services: Dell, VMWare, and Google are all currently pushing offerings similar to IBM’s.

What happens next, then, will depend greatly on execution. A major factor is whether IBM will be able to reap benefits from the Red Hat acquisition. The integration of the two companies is just six months along. Toni Sacconaghi, analyst with Alliance Bernstein, projects it will be another year and a half before it’s known whether adding Red Hat’s products and know-how has helped IBM win more customers.

Ives, from Wedbush, believes Krishna is the right person to make it happen, having gained a good reputation within the company after a string of successful projects. It may take time to convince the rest of the world of that, though.

Lowery says Krishna “looks a little bit like a blank sheet of paper to me,” and adds that it “remains to be seen” whether he can successfully execute on IBM’s cloud strategy.

Because of his age, Sacconaghi thinks Krishna may not have a great deal of time to make an impact. Both Samuel Palmisano and Louis Gerstner became CEO at age 51 and retired at age 60, while Rometty became CEO at 54 and is leaving at 62. Nonetheless, Sacconaghi believes IBM has signaled a long-term commitment to cloud services with the appointment of Whitehurst—just 52 —as president, making him Krishna’s heir apparent.

Read More

Artificial IntelligenceCryptocurrencyMetaverseCybersecurityTech Forward