IBM services head leaves amid reorganization

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July 19, 2005 (IDG News Service) -- IBM is reorganizing its Global Services business, replacing John Joyce as the group's head with a pair of executives.
Joyce, 51, who spent 30 years at IBM and once served as the company's chief financial officer, is leaving IBM to join private technology investment firm Silver Lake Partners. Taking charge of IBM Global Services will be Ginni Rometty, 47, who will be senior vice president of enterprise business services, and Mike Daniels, 51, senior vice president of IT services. The two will report directly to IBM CEO Sam Palmisano. The company announced the changes in a memo to employees today.
IBM spokesman Edward Barbini said the changes are not a consequence of problems in the services business. When IBM fell short of expectations in this year's first quarter, executives attributed some of the shortfall to trouble closing Global Services deals. The unit appears to have righted itself, however. In the second-quarter results IBM announced yesterday (see IBM hits Q2 targets, says goodbye to PC business), Global Services showed growth from last year and boosted its contracted backlog by $3 billion from last quarter's end.
Global Services is IBM's biggest moneymaker, bringing in 54% of the company's revenue for the last quarter.
"This is a natural evolution of the services business that we've been looking at for a while," Barbini said. "It reflects our clients' needs. Some choose to buy IT services, some choose to buy business transformation services."
The realigned services group will focus more heavily on "high value" skills, Barbini said, like those represented in the Business Consulting Services (BCS) group IBM formed around its acquired PricewaterhouseCoopers Consulting practice. Rometty previously ran BCS and oversaw PwC Consulting's integration with IBM.
IBM's new structure also spotlights executive Bob Moffat, who gained new responsibilities and a new title: senior vice president of integrated operations.
Moffat, a 27-year IBM veteran, has played a vital role at the company. Working with its vast network of suppliers to improve procurement and manufacturing, he has developed more streamlined systems that IBM estimates save it billions of dollars each year. Moffat will now work on bringing similar efficiencies to IBM Global Services' worldwide operations, Barbini said.
IBM likes to rotate top-management candidates through its various divisions, and its executive shuffles tend to have a domino effect. This one is no exception. Daniels, who now joins Rometty at the helm of Global Services, previously ran sales for IBM Americas. He will be replaced in that role by Marc Lautenbach, 44, who had served as general manager of IBM's small and medium-size business efforts.
In a separate executive move, IBM promoted Nicholas Donofrio, 59, to executive vice president

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