Exact numbers are hard to come by, but individual examples abound, with high-profile companies, including Chicago-based W.W. Grainger, Atlanta-based Delta Air Lines and General Motors in Detroit all shifting technology experts into either CEO slots at new internet startups or top e-business strategy positions over the last 18 months.
New internet marketplaces are following suit. A prime example in this arena is Carl Bass, CEO at Buzzsaw.com, a new business-to-business exchange that lets architects, suppliers and builders collaborate on projects and trade goods and services online. The eight-month-old startup is a spin-off of San Rafael, Calif-based Autodesk, a developer of computer-aided design software and other applications.
At this week's Net Market Makers conference here, Bass -- who previously was Autodesk's chief technology officer -- said he views himself as a natural choice for an online CEO slot given the new company's utter and complete reliance on IT to stay open for business.
"In this world of hosted applications and (digital) marketplaces, a huge part of the deal is getting the IT infrastructure correct, which is something that has been the lifeblood of CIOs for years," Bass said. And because of his experience as a technology user, Bass said he understands the need to invest heavily in IT and to get it right the first time.
"My question often to the IT team here is, 'Are we spending enough,' " he said. "We have hit upon a market opportunity where the failure of our IT systems is one of the things that could really cripple our ability to succeed. It's one of the ways I don't want to fail in this business. Not to do the appropriate things in IT is just inexcusable."
Abbas Syed spent 12 years developing e-commerce software at Hewlett-Packard and Sun Microsystems before becoming CEO at Mountain View, Calif-based OneBuild, a new internet procurement marketplace that also caters to the commercial construction industry.
"It's easy for people with a technology background to grasp the business part of things and combine the two," Syed said. "But for people who come purely from the business side, it's harder to leverage technology to better direct the business. The reasons are that the technology is so complex and it is changing everyday.
Still, the transition hasn't been without its challenges. "There was a steep learning curve I had to go through," Syed said. "For example, I didn't understand how to do market segmentation, but learning is a part of life."
But not every CIO-turned-CEO will face the same steep learning curve, according to Michael Boyd, an analyst at International Data Corp.
"Not all CIOs are necessarily technical people," Boyd pointed out. "The people running off to run dot-coms may come from the CIO ranks, but they may also have had sales and marketing and other business experience before moving over to manage (the IT department)."
The one thing that remains consistent across virtually all of the new dot-com spin-offs and business-to-business internet marketplaces is a critical need for experienced executives.
Once the technology infrastructure is in place, "what these companies are competing fiercely for right now are grey heads", Boyd said. "They see that they need people who actually know how to structure, run and improve a business."