IBM president Jim Whitehurst resigns after deal with Red Hat

Jim Whitehurst, CEO of Redhat and Ginni Rometty, CEO of IBM discuss IBM’s acquisition of Redhat.

Adam Jeffery | CNBC

Shares of IBM fell as much as 5% on Friday after the enterprise software and hardware maker said its president, Jim Whitehurst, decided to resign. The stock closed almost 5% lower in the day’s trading session.

Whitehurst came in 2019 through the $ 34 billion acquisition of open source software company Red Hat, IBM’s largest acquisition to date, which closed in mid-2019. He had been president and CEO of Red. Hat from 2008 to April 2020, when he became president of IBM.

The move reflects a new challenge for IBM, which has pursued growth in part by focusing on deploying Red Hat products across multiple clouds, including leading vendors such as Amazon and Microsoft. Before the deal, IBM promoted its own public cloud infrastructure to clients, in addition to selling products that companies could implement in their own data centers.

Arvind Krishna, who replaced Ginni Rometty as IBM CEO since last year, was “a principal architect” of the Red Hat deal, IBM said last year in the announcement about the Whitehurst promotion. The company praised Whitehurst for its execution. “During his tenure at Red Hat, revenue grew more than eight times and market capitalization more than 10 times,” said IBM. Whitehurst will continue to be an advisor to Krishna and other IBM executives.

In the first quarter, Red Hat’s revenue grew 17%, while IBM as a whole grew 1%.

Correction: Whitehurst came to IBM in 2019.

LOOK: IBM CEO Arvind Krishna on the company’s ‘hybrid cloud’ strategy

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