Sam Palmisano, IBM

What it means: Palmisano sees business integration as key in IBM's continuing evolution from hardware manufacturer to a software- and services-led company. That's the main reason why he agreed to pay $3.5 billion to acquire PwC Consulting and add its industry-specific capabilities to IBM Global Services, the $35 billion, 150,000-person strong IT services entity that is now responsible for more than 40 percent of the company's overall business. But you can't ignore the fact that IBM still holds the lead in technology development, measured in R&D spending and technology patents. The server side of the business has turned its guns on an already weakened Sun Microsystems. In software, the company has been growing at double-digit rates, stealing share for DB2 and WebSphere from Oracle, BEA Systems and Microsoft, while still struggling to find the right formula for Lotus and Tivoli. Then there's the PC business, which is struggling despite cost cuts and streamlining.

VARBusiness' View: Despite IBM's strengths, it's no secret Palmisano has big shoes to fill. IBM's stock is down, though these days that's hardly a differentiator. But repeating the magic his predecessor performed will be no easy task. One thing is clear: Palmisano is not going to ride on Lou Gerstner's coattails. Early signs show he's acting decisively, having already sold off IBM's disk-drive business to Hitachi and made cuts in non-core areas. The decision to acquire PwC Consulting was a bold move, but it remains to be seen whether that boosts IBM's fortunes or becomes a drag on the company's cash and profit engine.

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