New IBM CEO is mastermind behind cloud strategy for growth

Bloomberg

In July of 2017, International Business Machines Corp executive Arvind Krishna walked into a routine meeting with senior leaders and delivered a surprise pitch that changed the course of the iconic 108-year-old company’s future.
For months Krishna, the head of IBM’s cloud computing division, had been thinking about a way to connect clients’ most important data, which was often held on private servers, to public cloud servers run by others including IBM, Amazon.com Inc and Microsoft Corp. Finally he proposed a way, creating IBM’s so-called hybrid multi cloud strategy.
The company was coming off of 19 consecutive quarters of shrinking revenue and lagging far behind rivals in cloud computing, the lucrative new field in business technology, when Krishna stood in front of a crowd of executives, including Chief Executive Officer Ginni Rometty, at the company’s Armonk, New York, headquarters. He ran a live demonstration of some of the hybrid cloud products from his Mac laptop.
“I showed an early version, not yet complete, of what we could do to about 60 or 70 senior leaders from inside IBM,” Krishna said in an interview last year. “I think the light-bulb went off for everybody.” The first question he received from the group was: when will it be ready to go to market?
IBM launched its hybrid cloud product three months later. Rometty called it a “game changer” for the company. Last year, at Krishna’s suggestion, IBM acquired open source software provider Red Hat for $34 billion to further that vision — a strategy some Wall Street pundits believe will finally breathe life back into Big Blue.
On January 30, IBM announced that Rometty would be stepping down after almost 40 years at the company and Krishna would be taking over. Though generally respected by her peers, Rometty, 62, inherited many challenges that she was ultimately unable to overcome. During her tenure, revenue and IBM’s valuation shrank by 25%, in opposition to other tech companies and the broader market, which have seen spectacular gains. Rometty, who will step down as CEO effective from April 6,
will stay on as executive chairman through the end of the year.
Restoring IBM even part way back to its glory days will require a radical transformation, steering the company away from its slow-growing unprofitable legacy businesses and towards the future of modern computing. Analysts say Krishna is up for the task.
Krishna, 57, has spent his entire career at IBM and witnessed the company’s ups and downs as it went from the world leader in computing and IT services to missing the cloud revolution and falling behind nimbler, younger rivals like Amazon.
Krishna’s elevation is reminiscent of the appointment of Satya Nadella, Microsoft’s cloud chief, into the CEO role in 2014. Like Krishna, Nadella also bet big on the cloud and won, boosting Microsoft’s market valuation to more than $1 trillion.
Krishna studied with Krishna at India’s premier engineering school, the Indian Institute of Technology Kanpur.

As the new CEO of IBM, Krishna would be a “Nadella-like” leader – calm but deep, firm but unaggressive, said Rishikesha Krishnan, a professor of strategy at the Indian Institute of Management in Bangalore. “If a company intends to make a serious shift or change, he’d be the man.”