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The company claimed the software was being used to promote racial discrimination.
Rometty joined IBM in 1991 and became chairman, president and CEO in 2012.
"IBM is unleashing its software from the data center to fuel the enterprise workload race to the cloud," said Senior Vice President Arvind Krishna.
IBM sued Jeff S. Smith last week in federal court in White Plains, accusing him of violating a noncompete agreement and demanding that he repay $1.7 million in stock bonuses.