Lou Gerstner is the IBM CEO credited with transforming the company from a hardware-centered business toward services during the 1990s.
Gerstner became IBM’s chairman and CEO in April 1993, arriving when the company was losing billions and was considering breaking itself into separate units. Instead, he kept IBM together, arguing that its strength was integrating hardware, software, and expertise into complete solutions for large customers.
Under his leadership, IBM expanded its consulting, outsourcing, systems-integration, and other services businesses while reducing its dependence on lower-margin hardware. He also made e-business a major corporate strategy and helped reposition IBM as a technology integrator rather than merely a computer manufacturer.
A common mix-up is confusing Gerstner with John Akers, his predecessor, or Sam Palmisano, who succeeded him in 2002. Palmisano continued the services-led strategy, but Gerstner is associated with the decisive 1990s turnaround. IBM’s market capitalization rose from about $29 billion in 1993 to roughly $168 billion by Gerstner’s retirement in 2002.