30 January 2002 Sam Palmisano is to take over as CEO of IBM in March. The current CEO, Lou Gerstner, will continue as chairman until the end of the year.
Palmisano, the company’s president and chief operating officer, has been with the company since 1973 when he joined as a sales representative. He has managed a number of IBM operations, including the services group, the server division and the company’s Asian arm. He is regarded by many as the catalyst that helped Gerstner change the company from a hardware company to a services company and has been widely tipped as Gerstner’s replacement.
“From March 1 on, Sam is our new leader,” Gerstner wrote in a note to employees yesterday (29 January), following a management meeting to approve the change. “My job will be to help him in whatever ways he seeks my time and counsel.”
Analysts said they expected little to change as a result of the management shift. “I would expect it to be business as usual,” said Andy Liersch of Parnassus Funds, while Tom Bittman of Gartner said that he expected Palmisano to be more visible than Gerstner. “We see Palmisano being put much more in the limelight as a public personality for IBM.”
When Gerstner steps down as chairman at the end of the year, Palmisano is likely to take over that job, too, but Gerstner is expected to be a continuing presence at the company, having been awarded a 10-year consulting contract in 1998 that will commence with his retirement.