Can This IBMer Keep Big Blue's Edge?

On Oct. 25, directors of IBM reached within the company’s ranks and named 30-year veteran Virginia “Ginni” Rometty chief executive officer. The choice was vintage IBM, which has had only nine CEOs in its 100-year history; all but one were longtime insiders. Yet in an era when the technology industry’s pecking order is often upended by companies only a few months old, IBM has managed to survive by remembering it is only one mistake away from irrelevance.

That has required discarding businesses it once dominated—think personal computers—and even transforming itself from a hardware maker into the No. 1 technology services company. Rometty says that despite IBM’s deep pockets and $100 billion in 2010 sales, she plans to keep pressing her management team to take more risks and embrace change. “I don’t believe in the inevitable, or in thinking that things have to and will turn out in a certain way,” she says. “Whatever business you’re in, it’s going to commoditize over time, so you have to keep moving it to a higher value and change.”