04
Mon, Nov
5 New Articles

Palmisano Elected IBM CEO: A Screenplay by Mario Puzo

Commentary
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times
Change, when it comes to IBM, is glacial in its momentum, sort of like watching the The Godfather films I, II, and III back-to-back-to-back in a single viewing. And so, last Tuesday, it seemed that a grand film noir epic was drawing to a close. The event: IBM's board of directors announced that it has elected Sam Palmisano to be IBM's CEO to replace Lou Gerstner on March 1, 2002. If you can imagine a much trimmer Marlon Brando in the role of Gerstner (and Al Pacino as Sam Palmisano), you will immediately get my drift.

Palmisano is already the president and chief operating officer, two positions he attained a couple of years ago. And though Lou Gerstner will remain chairman of the board until the end of 2002, it is clear that an era is quickly passing. John M. Thompson (Robert Duvall, anyone?), IBM vice chairman, has also announced he will retire from the company and board on September 1. This means, by the fourth quarter of this year, the reins of leadership will have irretrievably passed to the next generation of IBM executives, and the revolutionary path that Lou Gerstner charted for IBM will be a thing of history--if not film legend.

"Leave the gun. Take the cannoli."
--Peter Clemenza

It's easy to forget that when Lou Gerstner was brought in as chairman and CEO in 1993, IBM was a much different company, with very different priorities. Internally, IBM was fighting the great Systems Application Architecture (SAA) wars, trying to pull together its diverse architectures into a single strategic profile. At that time, the burning question within IBM was how to bridge mainframe, mini, and micro computing systems into a comprehensive solution that would satisfy the burgeoning needs of a whole new generation of computer users.

But outside of IBM, users were making their own choices of platforms--primarily by selecting networked PCs, Novell, and the rapidly evolving Microsoft Windows operating system. IBM was portrayed in the press and in the streets as a stumbling, corrupt giant preoccupied with its internal feuds and turf wars while its customers waited in the wings for service. IBM's sales suffered terribly, its stock values slid precipitously, and the company's leadership--composed of hand-picked, IBM-trained engineers--was forced to resign in disgrace. Whether IBM itself would survive was an open topic of debate.

"Don't overestimate the power of forgiveness."
--Michael Corleone

Lou Gerstner's appointment as chairman and CEO was revolutionary if only because he was the first non-IBMer to hold those jobs. He was neither an insider nor even an engineer, and as a result of his easy demeanor, his common-sense pronouncements seemed like breaths of fresh air. For instance, when asked to choose among IBM's various strategic computing platforms, Gerstner's response sent shockwaves through the company. As far as he was concerned, there were no strategic platforms! Not the System/390, nor the AS/400, nor the brand-new RS/6000. The purpose of IBM was to make and sell products that the customers wanted to buy. If the customers wanted mainframes, IBM would make them. If they wanted Windows-based networks, IBM would provide them, too.

"He's a businessman. I'll make him an offer he can't refuse."
--Don Vito Corleone

As sage as such a proposition may seem now, it created a cultural revolution within IBM: No longer would IBM attempt to dictate the direction of computing technology through proprietary engineering. Instead, it would listen carefully to what its customers wanted, and it would meet the demand within the context of a rapidly growing and changing marketplace. The ancient IBM motto "Think" was replaced by the new phrase "IBM Listens!"

The results Gerstner delivered are impressive. Between 1993 (when Gerstner joined IBM) and year-end 2001, the company's share price increased more than 800 percent, and its market value grew by $180 billion. The company also gained market share in multiple "strategic" areas, including servers, software, storage, and microelectronics. Simultaneously, IBM has received more U.S. patents than any other company for nine consecutive years--ensuring that its "secret technologies" would generate royalties for years to come.

"Keep your friends close, but your enemies closer."
-- Michael Corleone

Yet, as Gerstner gradually turns over the reins of power to Sam Palmisano, what is remarkable is that the question of the "strategic proprietary platform" is still drawing fire from the press. And in an age when Microsoft's proprietary operating systems now dominate the industry, IBM is on the opposite side of the open systems debate.

Instead of pushing for proprietary operating systems as it once did, IBM is now leading the movement for open systems and international standards. In fact, in the keynote speech at LinuxWorld last week, Bill Zeitler, senior vice president and group executive of IBM Server Group, said, "For decades the proprietary model of computing has defined the computer industry. That day is over, and those who don't realize it's over are on the wrong side of history." That's quite an impressive statement, coming from an IBMer who once served as the vice president of marketing for the "proprietary" AS/400 Division. And today, IBM has a server offering across the entire range of computing models--from PC network all the way up to mainframe--all of them offering non-proprietary Linux as an operating system for e-Business.

"? a man that doesn't spend time with his family can never be a real man."
--Don Vito Corleone

However, it has been through IBM's revolutionary Business Partner arrangements that customers have felt the largest impact of Gerstner's reign. Under Gerstner?s leadership, IBM vastly expanded the role of its Business Partner Executive Council (BPEC) and essentially franchised the IBM brand out to the qualified partners who created follow-on products and services. So important has this change been that by 2001 IBM had relationships with more than 100,000 partners--with more than 80 percent of iSeries revenues, 60 percent of pSeries revenues, and 20 percent of zSeries revenues derived directly from its Business Partner relationships.

Today, what started as BPEC is known as PartnerWorld, and the timing of the Palmisano announcement was designed to prepare Business Partners for this year's February 17 opening of PartnerWorld in San Francisco. (For more information on PartnerWorld, visit http://www.ibm.com/partnerworld.)

At PartnerWorld, the transfer of power from Gerstner to Palmisano will be put on public display for all the IBM Business Partners to view. In fact, Palmisano is slated to conclude PartnerWorld with a keynote speech, a true indication that an important transition has been accomplished. And to underscore the film noir epic, IBM has even arranged for a special appearance by screen director Francis Ford Coppola. No doubt, the Godfather-like significance of the scene will not escape Coppola's notice, as indeed, Mario Puzo himself might have written the script.

Thomas M. Stockwell
Editor in Chief

Thomas Stockwell

Thomas M. Stockwell is an independent IT analyst and writer. He is the former Editor in Chief of MC Press Online and Midrange Computing magazine and has over 20 years of experience as a programmer, systems engineer, IT director, industry analyst, author, speaker, consultant, and editor.  

 

Tom works from his home in the Napa Valley in California. He can be reached at ITincendiary.com.

 

 

BLOG COMMENTS POWERED BY DISQUS

LATEST COMMENTS

Support MC Press Online

$

Book Reviews

Resource Center

  • SB Profound WC 5536 Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application. You can find Part 1 here. In Part 2 of our free Node.js Webinar Series, Brian May teaches you the different tooling options available for writing code, debugging, and using Git for version control. Brian will briefly discuss the different tools available, and demonstrate his preferred setup for Node development on IBM i or any platform. Attend this webinar to learn:

  • SB Profound WP 5539More than ever, there is a demand for IT to deliver innovation. Your IBM i has been an essential part of your business operations for years. However, your organization may struggle to maintain the current system and implement new projects. The thousands of customers we've worked with and surveyed state that expectations regarding the digital footprint and vision of the company are not aligned with the current IT environment.

  • SB HelpSystems ROBOT Generic IBM announced the E1080 servers using the latest Power10 processor in September 2021. The most powerful processor from IBM to date, Power10 is designed to handle the demands of doing business in today’s high-tech atmosphere, including running cloud applications, supporting big data, and managing AI workloads. But what does Power10 mean for your data center? In this recorded webinar, IBMers Dan Sundt and Dylan Boday join IBM Power Champion Tom Huntington for a discussion on why Power10 technology is the right strategic investment if you run IBM i, AIX, or Linux. In this action-packed hour, Tom will share trends from the IBM i and AIX user communities while Dan and Dylan dive into the tech specs for key hardware, including:

  • Magic MarkTRY the one package that solves all your document design and printing challenges on all your platforms. Produce bar code labels, electronic forms, ad hoc reports, and RFID tags – without programming! MarkMagic is the only document design and print solution that combines report writing, WYSIWYG label and forms design, and conditional printing in one integrated product. Make sure your data survives when catastrophe hits. Request your trial now!  Request Now.

  • SB HelpSystems ROBOT GenericForms of ransomware has been around for over 30 years, and with more and more organizations suffering attacks each year, it continues to endure. What has made ransomware such a durable threat and what is the best way to combat it? In order to prevent ransomware, organizations must first understand how it works.

  • SB HelpSystems ROBOT GenericIT security is a top priority for businesses around the world, but most IBM i pros don’t know where to begin—and most cybersecurity experts don’t know IBM i. In this session, Robin Tatam explores the business impact of lax IBM i security, the top vulnerabilities putting IBM i at risk, and the steps you can take to protect your organization. If you’re looking to avoid unexpected downtime or corrupted data, you don’t want to miss this session.

  • SB HelpSystems ROBOT GenericCan you trust all of your users all of the time? A typical end user receives 16 malicious emails each month, but only 17 percent of these phishing campaigns are reported to IT. Once an attack is underway, most organizations won’t discover the breach until six months later. A staggering amount of damage can occur in that time. Despite these risks, 93 percent of organizations are leaving their IBM i systems vulnerable to cybercrime. In this on-demand webinar, IBM i security experts Robin Tatam and Sandi Moore will reveal:

  • FORTRA Disaster protection is vital to every business. Yet, it often consists of patched together procedures that are prone to error. From automatic backups to data encryption to media management, Robot automates the routine (yet often complex) tasks of iSeries backup and recovery, saving you time and money and making the process safer and more reliable. Automate your backups with the Robot Backup and Recovery Solution. Key features include:

  • FORTRAManaging messages on your IBM i can be more than a full-time job if you have to do it manually. Messages need a response and resources must be monitored—often over multiple systems and across platforms. How can you be sure you won’t miss important system events? Automate your message center with the Robot Message Management Solution. Key features include:

  • FORTRAThe thought of printing, distributing, and storing iSeries reports manually may reduce you to tears. Paper and labor costs associated with report generation can spiral out of control. Mountains of paper threaten to swamp your files. Robot automates report bursting, distribution, bundling, and archiving, and offers secure, selective online report viewing. Manage your reports with the Robot Report Management Solution. Key features include:

  • FORTRAFor over 30 years, Robot has been a leader in systems management for IBM i. With batch job creation and scheduling at its core, the Robot Job Scheduling Solution reduces the opportunity for human error and helps you maintain service levels, automating even the biggest, most complex runbooks. Manage your job schedule with the Robot Job Scheduling Solution. Key features include:

  • LANSA Business users want new applications now. Market and regulatory pressures require faster application updates and delivery into production. Your IBM i developers may be approaching retirement, and you see no sure way to fill their positions with experienced developers. In addition, you may be caught between maintaining your existing applications and the uncertainty of moving to something new.

  • LANSAWhen it comes to creating your business applications, there are hundreds of coding platforms and programming languages to choose from. These options range from very complex traditional programming languages to Low-Code platforms where sometimes no traditional coding experience is needed. Download our whitepaper, The Power of Writing Code in a Low-Code Solution, and:

  • LANSASupply Chain is becoming increasingly complex and unpredictable. From raw materials for manufacturing to food supply chains, the journey from source to production to delivery to consumers is marred with inefficiencies, manual processes, shortages, recalls, counterfeits, and scandals. In this webinar, we discuss how:

  • The MC Resource Centers bring you the widest selection of white papers, trial software, and on-demand webcasts for you to choose from. >> Review the list of White Papers, Trial Software or On-Demand Webcast at the MC Press Resource Center. >> Add the items to yru Cart and complet he checkout process and submit

  • Profound Logic Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application.

  • SB Profound WC 5536Join us for this hour-long webcast that will explore:

  • Fortra IT managers hoping to find new IBM i talent are discovering that the pool of experienced RPG programmers and operators or administrators with intimate knowledge of the operating system and the applications that run on it is small. This begs the question: How will you manage the platform that supports such a big part of your business? This guide offers strategies and software suggestions to help you plan IT staffing and resources and smooth the transition after your AS/400 talent retires. Read on to learn: