IBM Shakes Up Global Services Unit

IBM is shaking up its massive services business. John Joyce, the head of IBM Global Services, is leaving the company, IBM confirmed Tuesday. In his place, IBM veterans Ginny Rometty, Mike Daniels, and Bob Moffat will lead the company's $46 billion services arm. IBM officials say the triumvirate approach reflects the fact that CEO Sam Palmisano wants more executive focus on the various moving parts within the services business. "It's an evolution of the way we operate and manage this business," a spokesman says.

Joyce, a former IBM CFO, is leaving to join private equity firm Silver Lake Partners.

Rometty was head of IBM's Business Consulting unit, which principally comprises the consulting business IBM acquired from PricewaterhouseCoopers. She will continue to focus on consulting and other high-value services. Daniels was head of sales and distribution for the Americas and will run IBM's IT outsourcing and integration activities. Moffat was IBM's supply-chain chief and will oversee service delivery and fulfillment across Global Services. All three will report directly to Palmisano.

IBM's services unit, which accounts for half of the company's revenue, posted disappointing results in the first quarter but rebounded in the second quarter. IBM said the unit's revenue, in constant currency, increased 4% year over year for the three months ended June 30 to $12 billion. Though the increase was modest, the results revealed a number of positive trends that should boost future performance. New contract signings increased 45% to $15.5 billion, and the company signed 18 services deals larger than $100 million.

Paul McDougall is a former editor for InformationWeek. View Full Bio