RESEARCH TRIANGLE PARK – Jim Whitehurst, the former CEO of Red Hat who led the firm through a $34 billion acquisition by IBM and became the No. 2 exec at Big Blue, is stepping down.

CEO Arvind Krishna announced Whitehurst’s decision to leave after three years along with several other changes in a blog post.

IBM stock dropped 4% on the news and later fell 10%.

Red Hat had been delivering strong revenue growth as IBM stepped up its cloud sales efforts built around in large part Red Hat software and services.

IBM CEO’s risky move: Wall Street frowns on Whitehurst departure – stock drops 10%

Whitehurst had been seen as a possible choice as CEO when Ginni Rometty resigned as CEO. Krishna got the job a year ago and has made a host of reorganizational moves since then.

“I’m proud to work as Senior Advisor at IBM, a defining hybrid cloud and AI organization that has changed and improved the world since 1911,” Whitehurst wrote in a LinkedIn post.

Whitehurst led Red Hat as CEO for 12 years. He previously had served as chief operating officer at Delta Airlines.

IBM CEO Arvind Krishna. (Photo by John O’Boyle)

“Jim Whitehurst has played a pivotal role in the IBM and Red Hat integration. 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,” Krishna wrote.

“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,” he added.

In outlining the changes, Krishna wrote: “Our hybrid cloud and AI [artificial intelligence] strategy is strongly resonating with clients. I believe we are at a watershed moment in our journey. 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.”

IBM has said nothing else about the moves other than Krishna’s letter. Red Hat has remained silent.

Bloomberg news assessed the moves this way:

“The move reflects a new challenge for IBM, which has pursued growth in part through focusing on deploying Red Hat’s products on multiple clouds, including leading providers such as Amazon and Microsoft. Before the deal, IBM promoted its own public-cloud infrastructure to customers, in addition to selling products that companies could deploy in their own data centers.”

CNBC screenshot

Jim Whitehurst and Ginni Rometty discuss IBM’s deal for Red Hat on CNBC in 2018.

IBM also is preparing to split off its businesses services group, which has a big presence in RTP, later this year. It will be known as Kyndryl.

No other reasosn were cited for the change.

IBM acquired Red Hat as a move to capitalize on opportunities in cloud computing.

‘Fast and focused:’ CEO spells out his vision for IBM spinoff Kyndryl

Red Hat is based in Raleigh, and IBM operates one of its largest corporate campuses in RTP.

Other moves

Krishna also said several other changes are being made. He outlined them as follows:

  • When I became CEO, Bridget van Kralingen agreed to stay to help ensure my transition went well. She has now decided to step down from her current role as Senior Vice President, Global Markets. I support her decision and thank Bridget for the work she has done to build a stronger company that is more responsive to our clients’ needs, including launching our new go-to-market strategy, implementing our sales cloud and changing our sales structure. She has also been a champion of diversity, chairing our LGBT+ and Women’s initiatives.  Bridget will remain Senior Vice President, Special Projects for a year at which time she will retire from IBM.
  • Rob Thomas will become Senior Vice President, Global Markets. Rob has proven himself to be an exemplary leader and technology visionary. He has led various parts of our business such as data and AI, hardware, services, and software. He has also spent time outside the United States, including living in Tokyo when he led business development in the Asia-Pacific region. Rob is the right leader to deliver what our clients need, especially as our new go-to-market strategy kicks into high gear.
  • Tom Rosamilia will become Senior Vice President, Cloud and Cognitive Software. Tom has extensive experience within IBM. Most recently, his strong track record of success includes leading our systems business and achieving solid business results. Tom is no stranger to software. During his tenure, he has held several leadership roles, including as General Manager of WebSphere and leading products for the database business.
  • Join me in welcoming Ric Lewis as our new Senior Vice President of Systems. Ric has a stellar reputation in the industry. He led significant portions of Hewlett Packard Enterprise’s hybrid IT business spanning hardware systems, VLSI, software and cloud. For over three decades, he has helped drive a wide range of breakthroughs in the world of enterprise servers. Our systems business is an important source of differentiation for our clients and our hybrid cloud platform. As a gifted technologist and business leader, Ric will use his rich experience and expertise to take Systems to new heights.
  • Kelly Chambliss has been promoted to Senior Vice President, Americas and Strategic Sales, Global Business Services. Kelly will bring her extensive leadership experience and deep strategic and operational expertise to her new role. In this position, she will lead global strategic sales and continue her leadership of our Americas business.
  • Roger Premo will lead a newly constituted business development team, which integrates corporate strategy and will report to Jim Kavanaugh.
  • Bob Lord will continue in his role as Senior Vice President, Worldwide Ecosystems and report directly to me.