RESEARCH TRIANGLE PARK – For those who follow IBM and the six-year mission of Ginni Rometty to transform Big Blue, talk about when and who might replace her is not new. Sunday’s announced deal – from the attractive financial terms for Red Hat to the distinction that it would operate as a “distinct unit” with Big Blue under its CEO Jim Whitehurst and that he would report directly to Rometty – only increases that chatter.
Is Whitehurst soon to become the crown prince among IBM’s royalty?
After all, Rometty turned 61 on July 29. IBM tradition has been that chairs/CEOs retire at age 60.
“While it is very likely he will stay with IBM for the year or so required and then retire, there is the possibility, and this is pure speculation, that IBM could be priming him to be a contender for the position of IBM CEO should Ginny look to retire soon,” wrote Cassandra Mooshian, a senior analyst at Technology Business Research.
And in May Business Insider created a big sit with its reporting that IBM was looking for a potential successor.
IBM spokesperson Ed Barbini declared to Business Insider in no uncertain terms: “IBM is not looking for a new CEO, and any information to the contrary is absolutely and unequivocally false.”
The power given Whitehurst
However, Whitehurst has said some very interesting this since Sunday’s announcement of the $34 billion deal – the largest acquisition IBM has ever made.
From the start, he has maintained that Red Hat, which just turned 25, will operate as a “distinct unit” within IBM. He wants to protect Red Hat’s culture, which is certainly different in many ways given its Open Source/Linux ancestry as opposed to IBM’s 100-years-plus of tradition.
He said he is in the Red Hat-IBM merger “for the long haul,” noting that he’s a “young guy” at age 51.
In the conference call, Whitehurst even restated something differently than Rometty had.
Whitehurst also has stressed his desire for independence.
“Red Hat and IBM have been partnered for over 20 years, right, starting with the growth and development of Linux, which is, the foundation for cloud computing. And working closely with IBM overtime and especially as we work to put together this transaction,” he explained.
“It was clear that IBM has a deep, deep appreciation for our open source values, our culture and our unique talent and experience.” [Emphasis added.]
“We look forward to operating as a distinct unit powered by IBM after the close of the transaction and our brands, facilities go-to-market and partner strategies will remain intact. I think that’s really important, right.” [Emphasis added.]
Not exactly the responses or comments a lapdog would utter.
Rometty obviously spent a great deal of time and effort, let alone cash, in convincing Whitehurst to make the deal. And she values him highly as this comment clearly shows:
“[T]his is over the last year we’ve been talking about opportunities to work closer and closer because we’ve been work close together for decades, but how to even accelerate that as we both look at this hybrid opportunity multi-cloud world in front of us,” she said in a conference all.
“Jim and I shared the same strategic vision, and we have very complementary capabilities.”
On the other hand, in interviews as well as in a conference call with analysts about the deal, Rometty certainly has given no indication that she is ready to turn over the executive suite at IBM any time soon. The first female CEO of the company declared:
“I’ve talked to many of you about how does the IBM become the undisputed leader in this new world, chapter two of the cloud is hybrid and we are now going to be one – number one undisputed leader. This is what you need to know to move these clients. We know this better than anyone in the world to move their mission critical work on a safe journey to the cloud. And it is a world that will be open and multi cloud. So, we will preserve both the Switzerland [a refernece to Red Hat’s Open Source roots] but we will manage and make this safe in an integrated stack as well with Red Hat here and we now have access to the world’s largest developer community.”
Rometty has rebooted IBM, directing it toward Artificial Intelligence (think Watson), cognitive computing and the cloud. She declares the cloud as a “trillion dollar opportunity” and obviously believes Red Hat’s cloud wizardry is crucial to winning a market currently dominated by Amazon Web Services, Microsoft and Google.
But as part of the deal, Rometty made Whitehurst part of IBM’s senior management team. That move alone makes him a potential successor should Rometty decide she’s accomplished her mission in the next couple of years.
If a transition at the top does occur, no doubt Whitehurst would face competition for the job – should he decide he even wants it.
“[W]e’ve heard that several top executive-recruiting firms have been approaching people about throwing their names in the hat, including at least two outsiders and one IBM insider, according to someone with knowledge of the situation,” Business Insider reported.