Louis Gerstner, the businessman credited with turning around IBM, has died aged 83, the company announced on Sunday.
Gerstner was chair and CEO of IBM from 1993 to 2002, a time when the company was struggling for relevance in the face of competition from rivals such as Microsoft and Sun Microsystems.
After becoming the first outsider to run the company, Gerstner abandoned a plan to split IBM, which was known as Big Blue, into a number of autonomous “Baby Blues” that would have focused on specific product areas such as processors or software.
IBM’s current chair and CEO, Arvind Krishna, told staff in an email on Sunday that this decision was key to the company’s survival because “Lou understood that clients didn’t want fragmented technology, they wanted integrated solutions”.
“Lou arrived at IBM at a moment when the company’s future was genuinely uncertain,” he wrote.
“The industry was changing rapidly, our business was under pressure, and there was serious debate about whether IBM should even remain whole. His leadership during that period reshaped the company. Not by looking backward, but by focusing relentlessly on what our clients would need next.”
IBM had dominated the technology sector in the 1960s and 1970s with its mainframe computers. But having developed the IBM personal computer in 1981, the company lost ground in the booming PC market as competitors created “IBM-compatible” machines using Intel processors and Microsoft’s MS-DOS and Windows operating systems.
Gerstner startled reporters after arriving at the then loss-making IBM by declaring that “the last thing IBM needs right now is a vision” and insisting the top priority was restore the company to profitability and serve customers better.
One of his many decisions was to abandon its OS/2 operating system, which it had hoped to use to challenge Microsoft’s dominance of PC operating systems.
Gerstner had previously worked as president of American Express and CEO of RJR Nabisco before joining IBM. After he left he chaired the Carlyle Group.
Krishna said Gerstner had been a “direct” leader who expected preparation and challenged assumptions.
“I have my own memory of Lou from the mid-1990s, at a small town hall with a few hundred people,” he told staff. “What stood out was his intensity and focus. He had an ability to hold the short term and the long term in his head at the same time.
“He pushed hard on delivery, but he was equally focused on innovation, doing work that clients would remember, not just consume.”