An internal memo from Chair and CEO Ginny Rometty outlines a big shakeup in how IBM (NYSE: IBM) is structured, and various reports add other details. “Our industry is rapidly re-ordering,” Rometty told IBMers in a memo, and so is Big Blue as she remakes the company in her image for the future.

The memo, obtained by technology news website ITJungle early today, adds confirmation to recent reports from The Register in the U.K. and Business Cloud News that a major re-ordering, to use Romett’ys own term, is taking place.

Our own check on Friday verified the accuracy of those earlier reports. The impact on the Triangle, which is one of the larger IBM campuses, is not clear at this point. But the selling off of the x86 business has already resulted in some 

Inside IBM’s reorganization:

  • New structure is key to Big Blue’s transformation, say analysts at Technology Business Research.
  • Breaking down the new units and who the leaders are as reported by TBR.

Then came the IT Jungle report today. And as noted above, analysis firm Technology Business Research offers in-depth commentary on what all the changes mean.

In the memo, Rometty, who has been in charge of Big Blue for three years, writes:

“A year ago we laid out our strategy, and said that IBM’s investments, acquisitions, divestitures–and our own practices as IBMers–would be reshaped by our strategic imperatives of data, cloud and engagement, underscored by security.

“The past year has strongly validated our strategy, as clients embrace and invest in these new technologies. Our industry is rapidly re-ordering. And IBM has been moving aggressively–evident in a long list of ‘signature moments’ through 2014. They included the formation of IBM Watson; the global expansion of SoftLayer’s cloud pods; the launch of Power8; the creation of our cloud platform-as-a-service, BlueMix; our $3 billion investment in next-generation semiconductor R&D; the acquisition of Cloudant; the launch of Watson Analytics; our divestitures of x86 servers and semiconductor manufacturing; our enterprise mobility alliance with Apple; our cloud partnerships with SAP and Tencent; and our Big Data partnership with Twitter.”

Software, not Hardware

Getting out of hardware and chips has been a Rometty priority. And in the reorganization, software is king.

“As you can see, IBM software has become an essential element in every part of our company,” Rometty said in the memo. “Indeed, it is so because our software portfolio is the foundation of the world’s core business systems and powers the expanding array of cloud-based solutions we are bringing to clients.”

The x86 divestiture is the some $3 billion deal IBM made with Lenovo to offload that business, which was based in the Triangle.

And within the past few days IBM opened its first SoftLayer-enabled data center in Europe.

Meanwhile, as reported in its most recent quarterly earnings, IBM is showing substantial strength in the “cloud” while more Watson-related deals continue to be announced. 

Hints at Transformation in November

IBM Chief Financial Officer Martin Schroeter, who also has “enterprise transformation” as part of his job title, hinted that major changes were coming at an investors conference in November.

“{W}hat are the two most frequently asked questions we get right, what are the clarifying questions that our investors have and I think one is, is this transformation, is this transition that IBM is in, is it harder than others …We’re not doing cheese slices anymore,” he explained.

“So is this [transition is] harder … in some ways because we’re dealing now with three industry transformative events, data is a new natural resource, the shift to cloud and new systems of engagement.”

Two months later, details are coming into view.

Who Is Doing What Where?

Few personnel decisions have been disclosed, although Bloomberg reported last Thursday that Robert LeBlanc is now the senior vice president for IBM’s cloud group. He had led software and cloud services. 

One of the resulting new groups is focused on R&D and will be led by IBM Arvind Krishna, according to ITJungle. Krishna is “senior vice president of solutions portfolio and research,” according to the report. He had been general amaner of development and manufacturing within the Systems and Technology Group.

But will Rometty’s moves pay off?

As tech columnist The VAR Guy notes, Big Blue is “mired in a 10-quarter streak of declining revenue, most recently posting a 4 percent sales tumble in its Q3 2014 along with a 17 percent downturn in GAAP net income.”

IBM has yet to confirm – or deny – the new organization described first by The Register.

“The main units will include Research, Sales & Delivery, Systems, Global Technology Services, Cloud, Watson, Security, Commerce, Analytics. Mobility is expected to overlay some divisions.

“At the same time, the hardware and software channel teams will be rolled into the global Business Partner Group.”

Old names will disappear from the new organizational structure, according to Business Cloud News.

“So we will see new groups that will focus exclusively on categories like “Big Data & Analytics” and “Commerce & Security”, and these will assume responsibility for all software needed to address the category. This model builds on the established cloud and Watson business units that IBM already had,” an unnamed source told BCN.

“What was the old “Systems & Technology Group” will henceforth be called simply “Systems”, and takes on numerous management and other software products that are closely infrastructure related.”