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IBM Names Ginni Rometty as CEO

Palmisano Unexpectedly Passes Torch to First Woman to Run Big Blue

After the market closed Tuesday, IBM's president and CEO Sam Palmisano, 60, unexpectedly passed the touch to his successor Virginia Rometty, 54, who will become the first woman ever to run IBM. She starts January 1.

Palmisano, CEO since 2002, will remain chairman.

IBM CEOs have traditionally hung up their spurs at 60. It was thought Palmisano would stay on. Rometty, who was tipped for the job and has been at IBM for 30 years, will also be on the IBM board come the New Year. She currently heads sales, marketing and strategy.

IBM, now a $99 billion concern and the second most valuable high-tech company by market cap, said she "has successfully led several of IBM's most important businesses over the past decade - from the formation of IBM Global Business Services to the build-out of our Growth Markets Unit. But she is more than a superb operational executive. With every leadership role, she has strengthened our ability to integrate IBM's capabilities for our clients."

She is credited with championing and then integrating IBM's 3.5 billion PricewaterhouseCoopers Consulting acquisition and pushing into the cloud and analytics. Former HP CEO Carly Fiorina was reportedly willing to pay $19 billion for PWC but couldn't get it done.

Palmisano has left it to Romettty to deliver on his promise to realize $20 a share by 2015. During his tenure, IBM exited commodity businesses, including PCs, printers and hard disk drives, and pushed into emerging markets in China, India, Brazil, Russia and other developing countries, which Rometty spearheaded and which now account for 23% of IBM's revenues.

Rometty's obvious rival for the job was Steve Mills, now responsible for both hardware and software. He reportedly didn't want to be CEO.

Her elevation will put her in a tiny league consisting of Meg Whitman, now running HP, and Ursula Burns, who runs Xerox. Other women running Fortune 500 companies include Indra Nooyi of Pepsico and Ellen Kullman of DuPont.

"Progressive social policies" had nothing to do with Rometty's appointment according to Palmisano. In a prepared statement she said, "Sam had the courage to transform the company based on his belief that computing technology, our industry, even world economies would shift in historic ways. All of that has come to pass. Today, IBM's strategies and business model are correct....Sam taught us, above all, that we must never stop reinventing IBM."

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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