She succeeds Daryl Williams who announced plans to retire in April.
Coonan's elevation shocked many mainly because her name wasn't among those bandied about along the corridors of power. She's no newcomer to financial circles as Minister for Revenue and Assistant Treasurer, and has legal training, but in the IT industry she's a virtual unknown.
One familiar criticism of Howard's choice is her lack of knowledge, understanding and experience in the IT industry. Well, look at previous office bearers Richard Alston and Daryl Williams ... at least the prime minister is consistent.
History, however, has shown that we shouldn't be too quick to pass judgement.
On April 1, 1993, the man from Oreo-land was handpicked to save one of the world's largest computer companies from drowning under its own weight. After four years running RJR Nabisco, Lou Gerstner joined IBM as chief executive officer.
Gerstner studied engineering in university but found a niche in the financial realm which saw him hold key executive positions during his 11-year tenure at American Express. Shareholders, analysts and the media were shocked at his appointment but Gerstner proved he was the man with the golden touch and is largely credited for turning the sluggish Big Blue around.
An established banker, O'Neill steered the ARU to greater heights, mixing a blend of astute marketing and financial wizardry to grow the organisation by a whopping 750 percent during his tenure.
O'Neill's background in sports? Nothing much apart from his Royal Sydney Golf Club membership and watching rugby matches.
Like Gerstner, O'Neill succeeded because he stuck to the fundamentals -- listen, learn and lead. The men had a common goal of eliminating weaknesses in the system in order to deliver optimum results. While the customer was always right, employees and shareholders were allowed to play a crucial role in the development of both organisations.
While Alston and Williams were often criticised for their inept handling of the IT portfolio, perhaps Coonan can be the one to break this cursed trend. Otherwise, the interests of the information technology sector risk being shunted into oblivion.