The executive, who is widely regarded as the successor to IBM, has resigned in an extensive management reorganization because the board of directors of the American computer manufacturer supported the current CEO, Arvind Krishna, to complete a tentative reform.
Jim Whitehurst, former CEO of Red Hat Pole position After IBM agreed to pay $37 billion for the open source software company in 2017, he took over the top position. He was later appointed as the president of IBM, which is usually reserved for the next CEO.
On Friday, the news of his departure caused IBM’s stock price to fall by 4%. However, Krishna, regarded by many on Wall Street as the transitional chief executive, described this move as a redoubled effort on the current path of IBM under his leadership.
“He did great things for us, but he won’t stay here forever,” he said of Whitehurst. In an interview with the Financial Times, he added: “The acquired CEO usually lasts for one or two years.”
The IBM boss hinted that Whitehurst had been running to replace him, but because the company’s board of directors supported him in the next phase of IBM’s reforms, any hope of taking over in the short term was dashed.
“This is a very viable candidate. But I can’t speculate when he was,” he said of Whitehurst.
Moshe Katri, an analyst at Wedbush, said that after the acquisition, the former Red Hat CEO played a “key role” in IBM’s cloud strategy. “You expected the leadership to stay, but it didn’t happen. It was a setback.”
Krishna pointed out that earlier this year, the board of directors had appointed him as chairman and chief executive officer to show his support. He said that the broader reorganization of senior management announced on Friday was “about building a leadership team that will bring IBM to where I lead.”
Krishna is an architect acquired by Red Hat. This is a betting transaction that aims to give IBM a stronger position in the cloud computing business against giants such as Amazon Web Services and Microsoft.
As a former head of research, Krishna supported the acquisition of Red Hat under the leadership of former CEO Ginni Rometty, and then personally took over the top position in April last year. This succession was welcomed on Wall Street, which shows that IBM pays more attention to core technology, although he is widely regarded as a high-level replacement before the board of directors prepares to promote Whitehurst, who has previously worked at Red Hat for 12 years.
IBM is hiring a rare senior employee from outside the company and announced on Friday that it has appointed former HP executive Ric Lewis as the head of IBM’s systems department, including its mainframe business.
IBM executives who rose as part of the reorganization include Rob Thomas, head of cloud and data platform operations, who will take over as the company’s top sales and marketing executive. Former head of systems Tom Rosamilia has been appointed as the head of the company’s cloud and cognitive systems department, which plays a central role in IBM’s efforts to gain a place in artificial intelligence and cloud computing.
Krishna said that the management reforms announced on Friday aimed to make the company “more focused on execution and more on technology.”
He added that Whitehurst has agreed to continue as a consultant and will not leave to work for another company. “He is very polite. He is not going anywhere now,” Krishna said.