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The huge changes in the computing world caught IBM by surprise in the 1990s with the PC and client/server revolutions. Business purchasing decision making changed radically and IBM was slow to adapt resulting in billions of dollars in losses.
Enter Lou Gerstner in 1993 as IBM's new chairman and CEO. The first outside leader of the company, Gerstner cut costs by shrinking the company's workforce while developing new product lines. He anticipated the growth of network computing and pushed IBM toward that goal.