IIT-Kanpur alumnus Arvind Krishna will lead the 108-year-old American company — which posted annual revenue of $80 billion in 2018 — from April 6, when CEO Virginia Rometty steps down from that position. The company’s share price, which has been trending down since 2013 except for occasional spikes, rose by 5% in opening trade in the US following the announcement.
Indian-origin CEOs now lead tech companies that together command a market capitalisation of nearly $2.7 trillion. These include Satya Nadella of Microsoft, Sundar Pichai of Alphabet/Google, Shantanu Narayen of Adobe, Sanjay Mehrotra of Micron Technology, Nikesh Arora of Palo Alto Networks, and George Kurian of NetApp.
Krishna, 57, son of an Indian Army officer, joined IBM in 1990, right after university, and is currently its senior vice president for cloud and cognitive software, two of the company’s biggest focus areas. He led the company’s $34-billion acquisition of open source enterprise software company Red Hat in 2018, a deal that was the biggest in IBM’s history, and on which a lot of IBM’s future rides.
“Arvind is the right CEO for the next era at IBM,” said Rometty. “He is a brilliant technologist who has played a significant role in developing our key technologies such as artificial intelligence, cloud, quantum computing and blockchain.”
Many would be watching to see whether he can do for IBM what Nadella did for Microsoft. IBM’s annual revenue fell steadily for many years from 2011, when it had touched a high of $107 billion, and has risen only slightly in the past couple of years. It was weighed down by its legacy businesses, and could not transition to newer digital offerings with as much agility as younger companies like Amazon and Google. Nadella rejuvenated Microsoft with his focus on the cloud and partnerships with companies that were once regarded as competitors.
In IBM’s case, analysts remain divided on whether it can pull itself up in a sustainable way. The company’s decision to repose faith in a man who has been a researcher and core to IBM’s new-age offerings in cloud and AI has raised hopes. Krishna hold 15 patents, and perhaps because of his research focus, has been relatively low-profile.
Rometty described Krishna as a superb operational leader, “able to win today while building the business of tomorrow.” Arvind, she said, has grown IBM’s cloud and cognitive software business and led the largest acquisition in the company’s history. “Through his multiple experiences running businesses in IBM, Arvind has built an outstanding track record of bold transformations and proven business results, and is an authentic, values-driven leader. He is well-positioned to lead IBM and its clients into the cloud and cognitive era,” she said.
Alex Gorsky, chairman of the Board’s executive compensation and management resources committee said Krishna “thinks and executes squarely at the intersection of business and technology.”
Going by the track record of Indian-origin CEOs, there’s a good chance that Krishna will deliver. Nadella, Pichai, Narayen, Mehrotra, Arora, and Kurian have all produced great results as CEOs till now.