Advanced Computing in the Age of AI | Saturday, July 31, 2021

In IBM Executive Shuffle Just Before the July 4th Weekend, IBM President Jim Whitehurst is Out 

Jim Whitehurst, the former Delta Air Lines COO who joined Red Hat in January 2008 and led the open source and Linux company as it was acquired by IBM in July of 2019, is now out at IBM.

Whitehurst’s departure was one of a series of executive changes made by Big Blue on July 2 (Friday), just before the July 4th holiday weekend was kicking off. Whitehurst remained after Red Hat’s $34 billion acquisition and then 14 months later, in April of 2020, moved over from Red Hat’s CEO spot to become the president of IBM. He was replaced at that time as Red Hat’s CEO by Paul Cormier, a 19-year veteran of the open source market leader.

Arvind Krishna, CEO of IBM

In a July 2 post on the company’s website, IBM chairman and CEO Arvind Krishna wrote that the company was “announcing a series of important leadership changes effective immediately,” including Whitehurst allegedly “stepping down” as IBM’s president.

Jim Whitehurst has played a pivotal role in the IBM and Red Hat integration,” wrote Krishna. “In the almost three years since the acquisition was announced, Jim has been instrumental in articulating IBM’s strategy, but also, in ensuring that IBM and Red Hat work well together and that our technology platforms and innovations provide more value to our clients. Jim has decided to step down as IBM President, however I am pleased he will continue working as Senior Advisor to me and the rest of the Executive Leadership Team as we continue to evolve our business.”

Jim Whitehurst

At Red Hat, Whitehurst was beloved and trusted as he led the company as it transitioned from being a Linux and open source startup into a more advanced enterprise Linux and open source vendor with a catalog of products and services built to help enterprises of all sizes make the move to open source with confidence.

Analysts on Whitehurst’s Departure as President

Five industry analysts who spoke with EnterpriseAI about Whitehurst’s status all said they were surprised by the announcement.

“As someone with a long-term commitment to the business of open source, I am disappointed to see the departure of Jim Whitehurst from the role of president,” said Bill Weinberg, open source strategist at Linux Pundit. “His leadership kept Red Hat at the forefront of open source while simultaneously evolving the company to become a premier private and hybrid cloud provider. His direction deftly positioned Red Hat for the 2018 acquisition by IBM as that behemoth sought a new growth engine and looked to re-establish leadership as a cloud technology provider.”

Bill Weinberg, analyst

At the same time, said Weinberg, “this shakeup at 100-year-old IBM is business as usual. I have lost count of the number of reinventions, ousters and ‘seismic shifts’ at Big Blue over the last decades. Today’s emphasis on AI in the cloud is the right place for the IT giant, and it’s hard to argue with Arvind Krishna wanting new faces and newer thinking.”

But the market may be less sure about the executive changes, he said, as IBM stock tumbled about 5 percent on the news.

Another analyst, Gary Chen of IDC, said Whitehurst’s departure as IBM president “does worry me a bit as the whole point of the Red Hat acquisition was to bring in a modern platform into IBM and just as importantly some new blood and new approaches to IBM. So, now you do have to wonder what is going to happen with the stewardship of Red Hat and how much of a transformation IBM can pull off.”

Rob Enderle, analyst

Rob Enderle, principal of Enderle Group, said that Whitehurst’s early history as COO at Delta Air Lines meant he started out in a different kind of company and culture, even though he ended up leading Red Hat for many years.

“Whitehurst was never an ideal match for this project” at IBM said Enderle. “As a result, he was always likely to be replaced by more of a subject matter expert as IBM’s process is to assure technical competency in critical positions generally.  A capable executive, he was simply poorly matched to the job overseeing a progressive software company during a time of significant change.”

Because the president’s role at IBM was critical, “and because [Whitehurst] lacked the background to do it, it was always a matter of when he was going to leave, not if,” said Enderle.

“You bring a talent like Whitehurst as a turnaround manager, similar to [Louis] Gerstner at IBM,” Enderle continued. “But this isn’t a turnaround job. It is a sustaining and expansion job and, for that, you need a subject matter expert. Typically, you need a software specialist to run a software unit, not a general-purpose operational CEO. Whitehurst is the latter.”

Essentially, for IBM, it was a “Steve Ballmer problem,” said Enderle. “[Ballmer] was also operationally strong, but not a software engineer. Steve could tread water and performed well financially but lacked vision and had massive execution problems strategically. [Microsoft’s Bill] Gates and [Satya] Nadella, both of whom were practitioners, did far better because they understood how the mechanics of the products worked, something an operational guy doesn’t need to know.”

Charles King, analyst

Charles King, principal analyst with Pund-IT Inc., said like many other IBM-watchers, he thought that Whitehurst was being groomed to eventually step into the CEO position when Arvind Krishna decided to retire.

“Since the Whitehurst news was one part of an announcement of other senior executive transitions and new hires, it's hard to say whether this signals a broader shift I'm IBM's strategy,” said King. “The fact that Whitehurst is remaining as a senior advisor is a positive point though exactly what that role will consist of remains to be seen.”

Shelly Kramer, principal analyst and founding partner with Futurum Research, said the situation ultimately makes sense. "My thoughts are simple, in a situation like this, there's not room for two folks at the top. IBM has made it clear that Krishna is their guy," she said..

In an illuminating July 2 interview detailing the changes with The Financial Times, IBM CEO Krishna said that Whitehurst has “done amazing for us, but he wasn’t going to be here forever,” according to the story. “Acquired CEOs normally last a year or two.”

Krishna “suggested that Whitehurst had been in the running to succeed him but that any hopes of taking over in the near term had been dashed as the company’s board backed him to carry through the next stage in IBM’s overhaul,” the story continued.

“This is a very viable candidate,” Krishna told The Financial Times. “But I can’t speculate on what was a time for him,” he said of Whitehurst.

Here Are the Other Executive Changes

In his post about the executive changes, Krishna wrote that the company’s hybrid cloud and AI strategy is resonating with clients. “I believe we are at a watershed moment in our journey,” he wrote. “As the world begins to reopen, IBM has a unique opportunity to be positioned for a new and exciting era of growth, continue to accelerate the rate and pace of execution of our strategy, and strengthen our client-centric culture and our ability to provide technical expertise.”

Also announced by Krishna, Bridget van Kralingen, IBM’s senior vice president for global markets, is stepping down from that role and will remain as the senior vice president of special projects for a year until she retires from IBM. Rob Thomas is becoming IBM’s senior vice president of global markets in van Kralingen’s place.

Tom Rosamilia, who has worked at IBM in several leadership roles, including as general manager of WebSphere, will become senior vice president for IBM’s cloud and cognitive software division.

Ric Lewis, who formerly worked in HPE’s hybrid IT business, is IBM’s new senior vice president of systems, while Kelly Chambliss has been promoted to senior vice president for the Americas and for strategic sales for the company’s global business services.

Roger Premo will lead a newly constituted business development team that integrates corporate strategy, while Bob Lord will continue in his role as senior vice president for worldwide ecosystems.

“Bringing value to our clients is—and must continue to be—our north star,” wrote Krishna. “For our clients as well as for IBM, our technology platform and services serve as an important driver of business growth. With these changes, I am confident that IBM will be in a stronger position to help our clients and our business thrive.”

IBM could not be reached at press time to find out the status of the president position following Whitehurst's departure. The president post could go to Krishna while also serving as CEO, or the company could choose to bring in another person for the job. EnterpriseAI will update this story when we have more information.

The combination of IBM and Red Hat was seen as giving IBM a leg up in the fierce competition to deliver a range of micro-services based on key open source cloud technologies such Kubernetes container orchestrators, OpenShift and other multi-cloud management and automation tools. The acquisition also represented a bet by IBM that open source technologies will continue to drive enterprise cloud deployments as users look to diversify beyond current public cloud leaders Amazon Web Services, Google Cloud and Microsoft Azure.

 

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