Envisioning the Future

When Novell and WordPerfect married in an attempt to combat archrival Microsoft, the two companies didn't anticipate their megadeal would ultimately make it easier for customers to designate who in their minds was their No. 1 choice, and who was their distant second.

Once again, two giants--Hewlett-Packard and Compaq--are uniting to better compete against a bigger rival. And again, that bigger rival, IBM, appears to have the upper hand. While HP and Compaq brace for the difficult tasks of combining product lines, melding workforces and reducing redundancies, IBM continues to make gains unfettered by grand distractions, save, perhaps, for one.

Come March, IBM CEO Lou Gerstner's contract expires. At that time, he could retire or play a reduced role at the company. Gerstner, who took over IBM amid a stock slump and management crisis in the early '90s, is widely credited for turning IBM around. One possible successor, IBM president and COO Sam Palmisano, is an IBM veteran looking to take the company to new heights. Palmisano, who supported the company's decision to acquire Informix earlier this year, has made bold statements about IBM's future, signaling that he not only could slip into Gerstner's shoes, but would hit the ground running if and when he takes them over.

Palmisano brings a wide array of skills and experiences to the job. Named to his current post one year ago, Palmisano previously managed IBM's PC business, global services arm and server business. With responsibility for IBM's server family, Palmisano was a driving force behind the company's bold decision to rebrand the products. At the time, both the RS/6000 and the AS/400 had loyal followers among distinct customer sets and partner constituents. Palmisano's team, however, saw wisdom in rebranding IBM's server family, giving it the feel of a balanced, coordinated line of products with a shared, common future. Since rebranding the line as eServer, IBM has begun to grow at a pace faster than that of key rivals. Numbers from market researcher Gartner Dataquest reveal that in the second quarter of 2001, IBM's worldwide server shipments grew faster than those of Compaq, HP or Sun. Only Dell showed faster growth in the worldwide server marketplace.

Driving the Vision
Palmisano has expressed the hope that customers and partners alike see IBM as having a message with the same crispness as those of its competitors. Results from this year's Annual Report Card reveal that VARs, in particular, believe IBM has the best combination of partner programs and products in the business; they rated IBM programs as tops in both the entry-level and midrange server categories.

Despite Palmisano's years in PCs and servers, pigeonholing him as a hardware guy is a mistake. Unlike Gerstner, who once famously said, "The last thing IBM needs is a vision," Palmisano has a clear view into the future of computing. It includes a significant role for Linux, a technology often faulted for having no clear driving force behind it. Considering IBM is investing upward of $1 billion this year in Linux-related development, Palmisano's company may indeed be that driver.

Earlier this year at LinuxWorld, Palmisano told an audience that Linux would do for software what the Internet did for networks. "Linux is a standard around which the IT world has come together and can collaborate to solve difficult problems," he said.

If that proves true, IBM may have answered the thorny question of just who will fill Gerstner's shoes when he leaves IBM once and for all.