by Ed Scannell

IBM dances the VP shuffle

news
Jul 19, 20053 mins

IBM on Tuesday announced a reorganization of its mammoth Global Services (IGS) division appointing a team of three executives who will jointly head the organization replacing the departing John Joyce who is leaving to join Silver Lake Partners, a private technology investment company.

At the same time the company announced that 31-year IBM veteran Janet Perna, who shaped and directed IBM’s data base and content management strategies for well over a decade, is retiring. Under Perna’s reign IBM over the past couple of years pulled even with the long time leader in the data base market, Oracle, for market share. She will be replaced by Ambuj Goyal, who has headed IBM’s Lotus division. No replacement has been named for Goyal.

The three executives who will head IGS include Ginni Rometty, 47, who has the title of senior vice president of enterprise business services, Mike Daniels, 51, who is now senior vice president of IT services, and Bob Moffat, 49, who assumes the title of senior vice president of integrated operations focusing specifically on IBM’s services business.

The decision to install three executives to run IGS is not a direct response to the disappointing revenue shortfall the group experienced in the first quarter of this year, according to a company spokesman. Earlier this year company executives had attributed the shortfall to trouble closing some larger Global Services deals.

“It’s a natural evolution of the services business, and IBM is using these moves to help the company become more responsive and more competitive,” said Ed Barbini, and IBM spokesman. “It reflects how customers choose to buy services, and it’s an evolution of the way we operate and manage this business, so IBM can better take advantage of the growth opportunities in this market,” Barbini said.

As a way of offering proof that IGS is in the process of making a sales comeback, Barbini said the just completed second quarter showed IGS growing 6% over the last quarter with pre-tax income up 18% as compared with last year’s second. This improvement ended six consecutive quarters of declining growth rates. The group’s backlog is up sequentially $3 billion over the course of the second quarter and is now at $113 billion in total, a company spokesman said.

At least one Wall St. analyst did not see the move as unexpected or one that is particularly dramatic.

“John Joyce’s leaving should not come as too much of a surprise to investors in light of all the speculation about his being considered as a candidate for various CEO positions. Despite his strong contribution, Global Services has a strong enough bench that we would expect virtually no discernible impact, particularly since we imagine that IBM knew that this was in the making. Our rating remains OP/N,” said Laura Conigliaro an analyst with Goldman Sachs.

All three newly appointed executives will report directly to IBM Chairman and CEO Sam Palmisano.

In a related move Marc Lautenbach, 44, who has headed IBM’s small and medium-size business group (SMB), will replace Daniels who was head of IBM’s sales in North America.

Lastly, IBM announced it has promoted Nick Donofrio to Executive Vice President of Technology and Innovation, although his role of “driving innovation further inside and outside of IBM,” will not change, according to a company spokesman.