Posted on 01/29/2002 9:55:48 AM PST by Straight Vermonter
NEW YORK (Reuters) - International Business Machines Corp. (NYSE:IBM - news) said on Tuesday that Chief Executive Louis Gerstner, who led a massive turnaround of the once-ailing computer giant in the 1990s, will step down March 1 and be replaced by President Samuel Palmisano.
Palmisano has been expected to follow in Gerstner's footsteps since being named president and chief operating officer in July of 2000. He retains his title as president.
Gerstner -- who caused a storm of controversy soon after taking over in 1993 when he said he had no ``vision'' for IBM, but nonetheless led it through sweeping changes -- will stay on as chairman through the end of 2002.
He joined IBM in April of 1993 and helped push the company to build its services business, which is now its largest division in terms of revenues.
IBM also said John Thompson, who is vice chairman, will retire from the company and its board on Sept. 1.
Gerstner's departure comes as his contract expires on March 1, which is also his 60th birthday, and after a year in which IBM has booked profits amid the downturn in the economy and technology spending while competitors slid into the red.
That's no coincidence, one analyst said.
``He's going out at a peak ... There's no question about that. The timing is what always happens at IBM. At age 60 give or take a little bit, you get a new CEO. They did what was expected,'' said Jay Stevens, an analyst at Buckingham Research Group in New York.
Stevens said he didn't expect to see many changes with the new management.
``They've worked together for so many years that I don't think there will be any changes that we can identify right now between what Gerstner did and what Palmisano will be doing. It will be very much the same,'' Stevens said.
In a memo to IBM's several hundred thousand employees, Gerstner said that his departure isn't related to turning 60.
``There is no rule or age limit that requires me to do this now. I am doing it because I am convinced that the time is right. The company is ready, and so is the new leader,'' Gerstner wrote.
Noting that ``Sam bleeds Blue'' -- a reference to ``Big Blue,'' as IBM is called -- Gerstner said in the memo that Palmisano ''understands the character of our company at its soul, the incredible world-changing things it alone can accomplish -- and how it must continue to change in the years ahead.''
Neither Gerstner nor Palmisano were available for comment.
IBM shares were off 3 percent, or $3.65, at $104.50 in midday New York Stock Exchange (news - web sites) trading.
IBM's problem is that mainframes are dead, have been for years, and anyone believing news to the contrary has never seen a corpse twitch. IBM has a chance to become The Linux Company before mainframe revenues dry up. I give them a one in five chance of success.
Gerstner did a great job of stopping IBM's collapse. But on what basis is IBM going to grow? Can you name one? Like I said, maybe they can replace Sun by becoming the Linux Company. Maybe.
'cuse me. Bad example. Perhaps I was thinking of the SGI guy -- or is he a marketer too? How about the Yahoo guys?
But on what basis is IBM going to grow? Can you name one? Like I said, maybe they can replace Sun by becoming the Linux Company. Maybe.
I don't know. My only point was that when Louie took over in '92, I debated with my boss at the time as to whether this was a good move. I argued someone who knows nothing (or little) about technology should not be running a high tech company. He said if they guy was a good manager, he would make things happen. I guess he was right.
'cuse me. Bad example. Perhaps I was thinking of the SGI guy -- or is he a marketer too? How about the Yahoo guys?
But on what basis is IBM going to grow? Can you name one? Like I said, maybe they can replace Sun by becoming the Linux Company. Maybe.
I don't know. My only point was that when Louie took over in '92, I debated with my boss at the time as to whether this was a good move. I argued someone who knows nothing (or little) about technology should not be running a high tech company. He said if they guy was a good manager, he would make things happen. I guess he was right.
Without disrespect, you have absolutely no idea what you're talking about.
Mainframe sales are the core of IBM's business, and remain quite profitable.
No, PriceWaterhouse does the accounting audit.
Now
http://www.microsoft.com/windows2000/techinfo/planning/incremental/netware.asp
Much of novell comes free with MSFT.
I wonder if buying "big iron" in a handheld world w/out paying for the OS will be the norm in 10 years?
And the ThinkPad is one of the top five laptops I'd guess.
They also have some pretty solid software business in WebSphere and DB2 database.
Lou has a whole lot to be very proud of. Best wishes to him in his next adventure.
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