IBM goes for safety over excitement with its next CEO

BIG BLUE has a reputation in the IT industry as a safe pair of hands, and the appointment of Virginia 'Ginni' Rometty as CEO and president will do nothing to shake that view.

The handover from old to new boss has been handled smoothly. Current IBM CEO Sam Palmisano has not been forced out of the role due to a high-profile fallout with the board - think Carly Fiorina at HP - or due to a gradual decline in company fortunes, as with Nokia's Jorma Ollila. It's simply that Palmisano has reached 60 and after his 10-year tenure at the top of IBM, is retiring from the chief executive role. But he'll stay on as chairman of the board.

IBM has also avoided causing the internal friction and market negativity that often comes with the selection of an outsider. HP and Nokia both looked outside the company with the appointments of Leo Apotheker and Stephen Elop, and look how well that's turned out.

Ex-SAP chief Apotheker has already followed Fiorina out the door, after some decisions that could be described at best as poorly thought out.

Elop's appointment was swiftly followed by concerns that his previous role at Microsoft and deals with the Redmond firm would diminish Nokia as a standalone organisation. Fast forward to this week;s Nokia World show in London, and those fears seem genuine, as Nokia attempted to turn around its fortunes with some pretty underwhelming devices running Windows Phone OS.

IBM also gets brownie points for appointing its first female chief executive. Okay, so it took the firm 100 years, but female bosses of information technology firms are about as rare as snow leopards, and it's always useful to have another strong role model to encourage women into the IT industry and show that the glass ceiling doesn't exist everywhere.

Rometty's appointment was welcomed by industry analysts, who were confident that her background in so many different functions at IBM and the fact that she was involved in developing the current strategy would set her up well for the job. So it seems like everything is in place for Rometty to flourish at the head of IBM, but she has a tough act to follow.

It's clear that Palmisano has been an extremely successful CEO for IBM. He spun off the firm's PC business at a time when it could still get a decent price for it, in stark contrast to HP's present quandary. As the firm moved away from consumer hardware, it grew the focus on enterprise software and services, a high-value business enhanced through canny acquisitions such as consulting firm Pricewaterhouse Coopers and business intelligence firm Cognos.

Palmisano might be unassuming and little known outside of IBM - he's certainly not a personality along the lines of a Ballmer - and rarely appears at industry events. However, under its current CEO, IBM increased its earnings per share by five times. And more importantly for its reputation as a technology company for the next 100 years, IBM also invested more than $50bn in research and development during Palmisano's tenure.

But Rometty has been a key part of these achievements, and has already said she is keen to carry on where Palmisano has left off, rather than totally shake up IBM. The prospects look bright for what could prove to be the most successful female technology CEO reign yet. µ