IBM undergoes big shake-up

In a major restructuring, IBM has promoted Samuel J. Palmisano to the job of president and chief operating officer, and John M. Thompson to the post of vice chairman. The shake-up at Big Blue has already brought other changes as well, including the division of IBM's former Enterprise Systems Group into separately managed server and storage systems groups.

Although both will report to IBM chairman and chief executive officer Louis V. Gerstner, Palmisano and Thompson will play very different roles, according to sources at IBM. Palmisano, who previously led the Enterprise Systems Group, will now directly oversee eight other operating units: IBM Global Services, Sales, Distribution, Software, Technology, Storage Servers, the Personal Systems Group and the Global Finance Unit.

Thompson, who was formerly head of the IBM Software Group, will now manage both IBM's Strategy unit and Manufacturing Technology research unit.

Thompson also will be in charge of "exploiting the right emerging technologies in the future," an IBM spokesperson said. Specific areas Thompson will look at include Linux, wireless technologies and "life sciences, such as putting IBM technologies to work in the study of new pharmaceuticals," she added.

Thompson will be succeeded in his former job by Steve Mills, who was previously general manager of the IBM Software Group.

Meanwhile, the Enterprise Systems Group formerly headed by Palmisano will be split into two components. Bill Zeitler, a general manager of enterprise servers within the old Enterprise Systems Group, will take over a portion of Palmisano's earlier duties, overseeing a new Server Group, which will focus on enterprise, Web and midmarket servers.

Linda Sanford also will step into some of Palmisano's shoes. Sanford has been promoted from general manager of the Storage Subsystems Unit within the Enterprise Systems Group to senior VP and group executive of a newly formed Storage Systems Group.

IBM declined to comment on whether any other reshuffling is anticipated. "We have no additional announcements to make at this time," the spokesperson said. The changes take effect on Sept. 1.