Sam Palmisano (2)

"Sam was always there to pick up the slack," recalls Augie Miceli, an assistant coach when Palmisano played as a lineman doing double duty on both offense and defense. "He was a hard-nosed football player. The kind of guy that hung in there."

Palmisano is still a hard-nosed competitor. Only now he is running plays for the world's 19th largest company. For Palmisano, who in March became what is only IBM's eighth chief executive in 88 years and last month was named successor to retiring Chairman Lou Gerstner effective Jan. 1, the winners and losers are now decided at the end of each quarter rather than every Saturday afternoon.

The wood-paneled boardrooms he frequents now are a long way from the world of greater Baltimore high school football, where the tough middle-class kid, nose constantly bandaged from the banging it took from his helmet cage, mixed it up on the field. Palmisano went on to play varsity football at Johns Hopkins University and was even asked to try out for the Oakland Raiders.

But it was more than blocking and tackling that set Palmisano apart. The honors student motivated others by the example he set on and off the field. Competitive. Passionate. Those are the words classmates and colleagues use to describe Palmisano. "The other kids really looked up to him," Miceli says.

These days, it is 300,000 IBM employees who are looking up. The 51-year-old CEO has spent his entire career at IBM and moved swiftly to put his stamp on the company in the midst of the biggest technology downturn ever. In late July, he drove the $3.5 billion acquisition of PwC Consulting to move more solution sales. He has made a series of small software acquisitions. And he tightened IBM's belt by trimming its workforce by 15,000 employees and selling its hard-disk drive business in June to Hitachi. In October, Palmisano clearly detailed his vision for IBM's future, unveiling an "e-business on demand" utility computing strategy in which solutions are offered in the same manner a utility provides electricity.

Solution providers welcome Palmisano's solid grasp of the channel and his push to make sure IBM is their partner of choice. It is no mistake that Palmisano, whose father ran an independent auto repair business, chose IBM's PartnerWorld in March for his first public appearance after being named CEO.

"It didn't take him three pico seconds to understand the channel and how important it is," says retired IBM channel chief David Boucher, a 30-year IBM veteran. "He understands the channel management issues around pricing and services conflict, which is not easy stuff."

Boucher compares Palmisano to Yankees manager Joe Torre, whose players never want to let him down. That said, Palmisano is the first to take an executive to the woodshed for not meeting a sales goal. Boucher knows this from experience. The IBM boss once chewed him out and sent him back to the field to meet a missed forecast. But a minute later, he asked Boucher if he'd had lunch. "His ability to motivate people is his defining characteristic," Boucher says.

If Gerstner was an outsider from RJR Nabisco who became a celebrity CEO, Palmisano is the insider who shuns the limelight.

Gerstner had little technology background and ruled IBM with a cold, hard edge. Palmisano has good technology instincts and chats with employees in the halls. Gerstner, regularly featured on Vanity Fair's New Establishment list, had bodyguards and limos, and demanded results with a succeed-or-leave philosophy. Palmisano keeps his own schedule, travels without an entourage and is the type of boss who rewards managers with a round of golf if they exceed expectations.

Palmisano is "more gregarious" than his predecessor, says Steve Mills, IBM's senior vice president and software group executive. "Not that Lou doesn't have a sense of humor and personal style. But Sam is Sam."

When Gerstner came to IBM, Palmisano was one of the executives that impressed him. Palmisano plainly and simply delivered results over and over again, even under the most dire circumstances. Palmisano set a course and then executed. He delivered numbers on the services side that forever changed IBM from a once-struggling hardware and software maker into a services behemoth. He turned around the server business at a critical juncture. And he backed the Linux bet that is paying off handsomely for IBM, says Steve Solazzo, general manager of IBM Linux. In the first half of this year, 15 percent of the Z Series mainframe MIPs shipped with Linux. "Sam had the early vision," Solazzo says.

The IBM chief executive gets high marks from channel executives for his ability to drill deep on channel issues. When Rick Hamada, president of Avnet Computer Marketing, first met Palmisano, the latter had just taken the helm of IBM's struggling server group. The first meeting was no standard "meet and greet." It ran 30 minutes over schedule as Palmisano addressed a number of channel issues, sketching ideas on a whiteboard and calling in an IBM finance staffer to tackle a problem.

Fast forward to February 2002, when Palmisano was named CEO. One of his first meetings at IBM's PartnerWorld show was with Hamada and Avnet Chairman and CEO Roy Vallee. "He made us feel like a true partner. The fact that he made time to meet with us in the midst of all the other competing demands on him speaks volumes about his commitment to the channel," Hamada says.

Chris Heidelberger, the chief executive of ChannelWave Software, a Cambridge Mass.-based vendor of partner relationship management software, is struck by Palmisano's just-plain-folks demeanor. Heidelberger was paired with Palmisano, whom he did not know, in a golf event. When he asked about Palmisano's job, Palmisano just said, "I work for IBM." By the third hole, Heidelberger realized who this was,but not from Palmisano, who never mentioned his role. "It is very refreshing to see someone so down to earth leading such a highly charged, successful organization," Heidelberger says.

That leadership style has won Palmisano many fans in the divisions he has headed up, most notably in services. His many jobs have also given him "an intimate knowledge of partners and what is important to them," says Peter Rowley, general manager of IBM Global Business Partners.

Palmisano is constantly checking with his top reports on channel sales. In fact, he insists that senior executives use Lotus' SameTime instant messaging so he can ping them. Rowley once forgot to shut off SameTime when he moved away from his computer and Palmisano messaged him to ask how the quarter was looking. Five hours later, he saw Palmisano's message and apologized for the delay. "I didn't make that mistake again," Rowley says.

Palmisano's greatest accomplishment has been putting IBM at the top of the services pyramid. Now he is moving to take it up a notch with the PwC acquisition and "e-business on demand" strategy.

If Palmisano's track record is any indication, partners will be on the front lines of the "e-business on demand" push. "There is no way IBM could do this alone," says Sam Albert, president of Sam Albert Associates, a Scarsdale, N.Y., consulting company. "This is going to be a boon for business partners because partners are the way IBM can deliver the electricity, or juice, for 'e-business on demand' utility computing."

Edward F. Moltzen contributed to this story.

IBM's WebSphere products have made it possible for DB2 to co-exist happily with other databases, says John Aviles, owner and senior architect of Resource Solutions Group, a Chantilly, Va.-based solution provider. Aviles says both he and his customers appreciate not having to know in which database information resides.

That's the kind of sentiment that helped earn Perna a spot on the CRN Readers' Choice list. It is also the kind of thing that makes the former math teacher break out in a big grin.

A shrewd competitor, Perna is pleased as punch to count companies such as The Home Depot and Wal-Mart among DB2's devotees.