Meet IBM's new ceo, who spearheaded the $34 billion purchase of Red Hat as part of a master plan towards conquering a $1 trillion market

Meet IBM's new ceo, who spearheaded the $34 billion purchase of Red Hat as part of a master plan towards conquering a $1 trillion market

IBM CEO Arvind Krishna


Incoming IBM CEO Arvind Krishna

  • Arvind Krishna, the new CEO of IBM, joined the tech giant in 1990 when it was an iconic and dominant player in enterprise tech.
  • When he takes over as CEO in April, Krishna will be leading a company that's been described as a tech dinosaur.
  • The nearly 109-year-old tech company has struggled to adapt to the rise of the cloud, where it has been outpaced by stronger rivals led by Amazon, Microsoft, and Google.
  • Krishna has been spearheading IBM's counteroffensive, which is focused on taking on hybrid cloud computing, which he expects will be a $1.2 trillion market.
  • Krishna also was instrumental in IBM's $34 billion acquisition of Red Hat last year. He has said that Red Hat is a key component of IBM's hybrid cloud strategy. That acquisition has already started to bear fruit, when IBM posted stronger-than-expected results thanks to growth in Red Hat revenues.
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When Arvind Krishna joined IBM in 1990, the tech giant was an iconic and dominant player in enterprise tech.

When he takes over for outgoing CEO Ginni Rometty in April, the 57-year-old Krishna will be leading what's been described as a dinosaur of technology.


Today, the nearly 109-year-old tech powerhouse is adapting to big changes, most notably the cloud where it has been outpaced by stronger rivals such as Amazon, Microsoft and Google.

But IBM unleashed a new strategy to regain its former luster, in a counteroffensive where Krishna has been playing a very central role.

"I am thrilled and humbled to be elected as the next chief executive officer of IBM, and appreciate the confidence that Ginni and the board have placed in me," Krishna, who rose up the IBM ranks from general manager to senior vice president over the past decade, said in a statement.


That confidence is anchored on the strategy Krishna has led for reclaiming IBM's enterprise tech leadership in the cloud era.

The game plan

The game plan is focused on shift in the way the cloud has evolved. The cloud disrupted the enterprise market by letting businesses set up their networks on web-based platforms run by the likes of Amazon, Microsoft and Google. IBM has tried, but failed, to be a bigger player in this arena.

But IBM is eyeing a newer trend, hybrid cloud, in which businesses set up networks in public clouds, while keeping huge chunks of their data and applications in private data centers.


Rometty has said IBM expects the hybrid market to eventually be worth $1 trillion. Krishna, who is currently senior vice president for cloud and cognitive software, sees an even slightly bigger market.

He's estimated the hybrid cloud market, in aggregate, to be worth about $1.2 trillion in the future, broken down this way: $100 billion for hardware and components, $150 billion for cloud infrastructure, $350 billion for software and $550 billion for consulting and management services.

"Approximately half is still services, and the other half is what I would call product, software as well as hardware," he told Business Insider in an interview last year shortly after IBM closed its acquisition of Red Hat.


Krishna was instrumental in pushing the $34 billion purchase, which is seen as key to IBM's hybrid cloud strategy. The widely-used open-source cloud software maker's products are popular among developers, which could potentially expand the tech giant's reach in enterprise cloud.

Some analysts were worried that the merger wouldn't work. Asked in a July interview what Wall Street should expect, Krishna quipped: "That's a question that I'm going to be a little bit shy about." He said the company will stick to a schedule for unveiling its projections.

Bearing fruit

The answer became clearer earlier this month when IBM posted results that surprised Wall Street. The financials were boosted by Red Hat revenue which jumped 24% year over year and exceeded $1 billion.


Krishna has said Red Hat will give IBM the added firepower to cash in on another arena, AI. IBM is seen as a trailblazer in AI with its Watson technology, but the company has so far struggled to figure out a way to use that technology as a significant advantage over rivals like Microosft in the enterprise market.

Red Hat will change that by making it easier for enterprises to use AI to collect and process massive amounts of data to run their business, Krishna previously said.

"This gives us a massive reach to take AI tools and give them to people wherever they want," he told Business Insider at the time. "That's the 'aha' that comes about..There is huge value in all of the data that lies inside enterprises. To unlock that value, you need to collect the data, organize the data, analyze the data and you do AI on it."


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