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Big changes at big blue

Emailed on January 31st 2020 in The Friday Forward

IBM made the surprise announcement yesterday that CEO Ginni Rometty will step aside April 6. When Rometty ascended to the corner office in Jan. 2012, IBM was still shedding its image as a legacy hardware provider. Rometty refocused the company on cloud computing services and emerging technologies like AI, blockchain, and quantum computing.

Some notes:

  • IBM stock has declined 27% over the last eight years.

  • IBM has struggled to keep pace in the competitive cloud market as Amazon and Microsoft surged ahead.

Perspective:

  • Amazon AWS has a $40B revenue run rate, has grown 34% annually, and now makes up 67% of Amazon's operating income.

  • Microsoft Azure has an estimated $20B run rate, has grown 62% annually, and is tracking to be Microsoft's biggest business

Nerd pun for your Friday: IBM's competition in cloud computing is red hot, so it's turning to Red Hat.

Taking over from Rometty is cloud and cognitive software boss Arvind Krishna, a key architect of IBM’s 2019 acquisition of Red Hat—a $34 billion play for what’s known as the “hybrid cloud” market. Red Hat’s CEO Jim Whitehurst will become IBM’s president.


IBM stock was up as much as 5% after hours following the news.

My cool points are down 5% since this pun.


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