Less than 24 hours after IBM announced its executive shakeup — replacing its CEO Virginia Rometty with senior vice president Arvind Krishna and installing Red Hat’s CEO James Whitehurst as its new president — its stock got a bounce.
By Friday at 3pm, Big Blue’s shares were trading up by nearly 4.95 percent at $143.52 on the news.
Analysts have also chimed in with cautious optimism, including Geoff Woollacott, principal analyst and senior strategy consultant with TBR Cloud and Software.
“The current climate is a different kind of IT landscape. The requirements and demands from enterprises are vastly different, which necessitates a different kind of leader. Arvind Krishna is, therefore, well suited to articulate and assure customers going forward,” he told WRAL TechWire by email.
Elitsa Bakalova, professional services senior analyst at TBR, added that it will bring a “fresh perspective.”
“Promoting the CEO from within is something that typically inspires employees and will prevent potential challenges related to future strategic direction of the company. The new CEO has a long history with IBM, he is a technologists and an operations expert,” he said.
Catie Merrill, research analyst at TBR, however, maintained a “wait-and-see” approach.
“IBM, with the help of Red Hat’s platform, is looking to take customers’ mission-critical back-office workloads to the cloud, in what it deems to be ‘Chapter 2 of the cloud’. This is a competency that has yet to be proven but may hold true under new leadership.”
Others are also saying Whitehurst is a good choice for president, including those who know him personally after crossing paths here in the Triangle.
“I don’t know if you could be in the Triangle and not know Jim,” said serial entrepreneur Scot Wingo, just hours after the announcement, who says he’s been friends with Whitehurst for the past 10 years or so.
Whitehurst joined Red Hat in December 2007 after spending six years at Delta Air Lines as COO and in charge of international expansion.
He graduated from Rice University with a bachelor’s degree in economics and computer science, according to his LinkedIn.com account. He also received a General Course degree from the London School of Economics and an MBA from Harvard in 1994.
Red Hat became the first $1 billion revenue open source software company in 2012. The company reported revenue of almost $3 billion for the company’s 2018 fiscal year.
“He’s been a mentor for me. I always go to him for advice. I know his wife as well,” added Wingo. “They’re a great group in the Triangle. I’m excited because he will bring a whole new breath of life into that cloud business, and he’ll have a broader span of control at IBM. It’s going to be really interesting to see what he does.”