New IBM CEO Rometty Faces Treacherous Cloud Computing Services Transformation

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Virginia "Ginni" Rometty, who will take the IBM CEO reins effective January 1, faces the tough task of transitioning IBM's $100 billion business into the cloud computing services era.

That was the assessment of top solution provider executives and industry analysts attending the BoB (Best of Breed) conference aimed at setting new business models for channel partners in a rapidly changing cloud computing services market.

Rometty faces the Herculean task of moving IBM from a traditional outsourcing services model to an operating expense-based cloud computing services model where "price points are vastly below what they are today for [traditional] outsourcing," said David Tapper, vice president of outsourcing and offshore services for IDC, a market researcher headquartered in Framingham, Mass.

The challenges Rometty faces are every bit as treacherous as the ones IBM faced as it transitioned from the mainframe computing era to the PC era, said Tapper.

"Systems integration technology consulting is becoming more embedded in delivery of operations through a SaaS (Software-as-a-Service) model so customers may not need as much system integration services anymore and IBM has a very big systems integration technology consulting service," he said. "IBM is dealing with a huge set of challenges."

Rometty, a 30-year IBM veteran who succeeds current IBM CEO Sam Palmisano, who will remain as chairman, probably has a five- to seven-year window to make significant changes to transition IBM into the cloud computing services era, said Tapper.

"She has got ramp up time, but at the end of the day, she has to tackle these issues head on," said Tapper. "My belief is IBM has to build a distinct business unit like a cloud unit that pulls it altogether and moves the old business model to the new business model."

Tiffani Bova, vice president of research focusing on IT marketing and channel strategies at Gartner, a market research firm headquartered in Stamford, Conn., said Rometty's current role as senior vice president and group executive for sales, marketing and strategy gives her an edge in helping bring IBM into the cloud computing services era.

Next: Rometty Must Define IBM's Cloud Computing Services Strategy

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