IBM Splits Global Services Again As Mike Daniels Steps Down As GM

January 14, 2013 Timothy Prickett Morgan

A year ago, after taking the helm of IBM, Ginni Rometty reshuffled some executive assignments, and one of the things she did after moving up and out of the company’s Global Services and sales organizations to become the company’s CEO was to get executives in place for the eventual retirement of her former peer at Global Services, general manager Mike Daniels. As 2013 got started, Rometty let IBMers know in an internal memo that Global Services was being split into two bits again, that was because Daniels was retiring on March 31.

Several years ago, before it was clear who would succeed CEO Sam Palmisano in running Big Blue, Rometty ran Global Business Services and integrated the Pricewaterhouse Coopers IT consulting business into it, which gave her the street cred to take the CEO job from Daniels and Steve Mills, who runs both Software Group and Systems and Technology Group these days. (Rometty is also a few years older, and it was never clear that either Daniels or Mills wanted the CEO post.) Daniels ran the other two-thirds of Global Services, the Global Technology Services part that does system integration, outsourcing, and maintenance. In a reorganization back in July 2010, Rometty was put in charge of the cross-group Sales and Distribution unit of Big Blue, and given that she was younger then either Mills or Daniels (who were only a few years younger than the retiring Palmisano), there was a high probability that Rometty was the front runner for the CEO post. When Rometty jumped to the top sales job, Daniels once again took over running all of Global Services.

Last year, when Frank Kern retired as head of Global Business Services, Bridget van Kralingen was promoted to replace him. Van Kralingen, who is 49, spent 15 years with Deloitte Consulting in South Africa before joining IBM in 2004; she has run the financial services segment for IBM’s GBS division in North America, as well as all of GBS in Northeast Europe, and most recently was charged with sales for all of North America for Big Blue. And she now has the job that Rometty used to hold and from which she became a rising star. Erich Clementi, who has myriad jobs at Big Blue and who is 54 like Rometty, has been running Global Technology Services as Daniels used to. And rather than appoint a new GM to head up a unified Global Services, van Kralingen and Clementi will report directly to Rometty.

Daniels graduated from Holy Cross College with a degree in political science and joined Big Blue in 1976, rising up through the various services ranks. Daniels was probably a contender for the CEO job himself along with Palmisano back in the late 1990s, and the fact that he ran the Sales and Distribution unit for the Americas region between services stints is testament to that. But Lou Gerstner took a shining to Palmisano, who had experience across PC, printers, services, and servers.

Daniels is approaching the traditional age of retirement at Big Blue, which is 60, so it is no surprise that he is leaving. It would not be at all surprising to see him take a CEO position at a smaller IT-related firm, which is what Kern did last fall when he took the top job at Aricent Group after retiring from IBM in January 2012.