IBM Corp executive Sam Palmisano is to take over as head of the IBM Server Group from Robert Stephenson, 61, who retires at the end of the year. Palmisano, currently group executive of IBM Global Services division, was once the executive assistant to former IBM chief executive John Akers, and has been mentioned as a possible successor to current chief Louis Gerstner. His name crops up regularly as a potential candidate when large computer companies are looking for a new CEO (Apple Computer Inc and Compaq Computer Corp, most recently), He is 48, and has been at IBM for 26 years.
Palmisano became general manager of the PC Company in 1996 reporting to Stephenson, then senior vice-president and group executive of the PC Co. Stephenson was credited with getting the PC unit back to break-even or better, following the estimated $1bn loss it made in 1994 under Richard Thoman, now CEO of Xerox Corp. He moved to head the server group in July 1997. Palmisano, who headed IBM’s Integrated Systems Solutions Corp before he got the PC job, became chief of Global Services in January 1998.
At almost $30bn in revenue, services is IBM’s largest unit. But IBM’s traditionally central hardware unit, generating $10.5bn in revenue, continues to need careful handling. Despite strong sales over servers related to the boost from internet hosting, IBM’s mainframe and minicomputer sales are still threatened by the prospect of slowing growth. Eleven years ago, Palmisano was one of the key executives behind the launch of the AS/400 line. Doug Elix, currently general manager of IBM Global Services Americas, will replace Palmisano as Global Services chief.
