IBM's Adkins Reassigned; Rometty Tells Employees They Need To 'Step Up'

IBM President and CEO Ginni Rometty also reportedly addressed IBM employees in a video that urges them to "step up" and move more quickly to new computing models to stay competitive.

The latest developments apparently are the fallout from last week's poor first-quarter financial results, including a 17 percent plunge in Systems & Technology sales.

[Related: IBM Partners Cheer Potential Sale Of x86 Server Business ]

While reporting the quarterly results to financial analysts last week, IBM CFO Mark Loughridge indicated that employee layoffs are likely this quarter and the company is considering changes -- and possible divestitures -- of its underperforming businesses including its System x, Power system and storage product lines. At the time the CFO specifically blamed much of the quarter's poor results on several big contracts for mainframes and software that didn't close before the end of the quarter.

Before the earnings were disclosed, CRN reported that IBM was in talks to sell its struggling x86 server business to Lenovo, the company that bought IBM's PC business in 2004 for $1.25 billion.

In an email to CRN, Adkins confirmed that he is now senior vice president of corporate strategy and Rosamilia, who previously held that post, has taken on the job of head of the Systems & Technology Group. He did not comment on the reason for the change and an IBM spokesperson said the company does not comment on personnel matters.

Adkins had been head of Systems & Technology since October 2009.

Before taking on the corporate strategy post, Rosamilia was general manager of the Power and mainframe z Systems product lines. He has worked at IBM since 1983 and held a number of programming and management posts within the IBM Software Group.

IBM's financial performance has been uneven since Rometty took the reins of the company Jan. 1 of last year. While the Armonk, N.Y., company's software and service operations have generally remained financially strong, the Systems & Technology Group has struggled. In fiscal 2012 ended Dec. 31, the group's sales, which includes the company's server and storage system products, fell almost 7 percent from $19 billion to $17.7 billion.

Rometty generally provides employees with a brief video commentary after each quarterly earnings. But this week the usual pep talk included comments that employees need to work harder, according to a story in Thursday's Wall Street Journal, which said it had seen the video.

The story, which described Rometty's comments as "unusually blunt," said the CEO told employees they need to speed up the company's shift to new computing models to get back on track.

"Where we haven't transformed rapidly enough, we struggled," Rometty said, according to the story. "We have to step up with that and deal with that, and that is on all levels."

That resonates with one IBM server reseller, who asked that he not be identified, who would would like to see the company move faster in approving discounted sales proposals to customers.

"Our competitors are able to deliver discounted proposals in hours. IBM resellers - and direct sellers for that matter - have to wait days and frequently weeks to get a price approval! We had a Pure System proposal in the seven figure range which tool 4 weeks to get approval. That in a nutshell is the problem," the partner said in an email sent to CRN.

"The prospects are there, IBM has the best products, and very capable channel and direct sales teams. They can't move approvals through the IBM maze quickly enough to compete with companies who delegate pricing to the field level."

PUBLISHED APRIL 25, 2013