IBM’s new CEO has an opportunity to reset the direction of the company. Outgoing CEO Ginni Rommety inherited a strategy put in place over two decades, which became fossilized in a lower margin services-led model that she helped architect. Ginni spent a large portion of her tenure shrinking the company so it could grow...but she ran out of time. It’s now up to Arvind Krishna to carry the ball over the goal line.
For decades, IBM has missed opportunities to aggressively invest in the key waves that are powering the current tech economy. Instead, it tried to balance investing in innovation with placating Wall Street. We believe IBM has an opportunity to return to the Big Blue status that set the standard for the tech industry. But several things must change, some dramatically, for IBM to succeed in this endeavor.