IBM CEO Ginny Rometty isn’t terribly concerned that her competitor Dell is buying her other competitor, EMC, in a $US67 billion deal that will create a mammoth company.
Rometty was talking at Fortune’s Most Powerful Women Summit going on this week in Washington, D.C. when her interviewer, Fortune editor Alan Murray, asked her about the merger.
Rometty shrugged it off.
“You build your own strategy. You don’t define it by what another competitor is doing,” she says, adding that she’s been deliberately transforming IBM to get out of most of the businesses where Dell and EMC compete.
“When I look at the IBM of today versus those companies, our profiles are entirely different. So you make your choice on strategy,” she said. “Some people make their choice on size, I happen to not be a believer in that. I’ve often said, especially in an industry that’s clamoring for growth, if I wanted size, I wouldn’t have divested $US8 billion of businesses.”
Shrinking by design
For instance, she sold IBM’s commodity server business to Lenovo and she actually paid GlobalFoundaries to have it take IBM’s unprofitable chip manufacturing business off her hands.
Indeed, IBM is currently shrinking in every way from revenue to headcount, and that’s “by design,” she says.
“Businesses that I think are no longer about the future, we’ve divested them. That’s the right thing,” she said, adding that the Dell/EMC merger is “mostly about hardware. We are 10% hardware, important but only 10%. We were in all those businesses and made choices [to exit them].”
She said the news about the Dell/EMC deal reminds her of her mantra “Steward for the long term. It’s not always easy, but you do it.”
When asked if she believes it would be easier to “steward for the long term” as a private company, the route that Dell took, she said, “Every decision I make, I make it as if [IBM] was private. When you manage your company for long term shareholders, and you manage the company for clients, two of the biggest stakeholders, you will make the right decisions.”
She says her guiding question is, “If this was my own money, would I do it?”
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