Palmisano takes the reins at IBM Server Group

IBM Global Services chief Sam Palmisano will take over as head of Big Blue's server division, replacing Robert Stephenson, who is retiring.

Palmisano, 48, is widely credited with not only maintaining the prestige of IBM's services arm but ratcheting it up a notch. That business brought in about $30bn in revenue last year. He is also considered by some to be the leading candidate to take over the top spot at IBM when CEO Lou Gerstner retires in a few years.

Douglas Elix, who currently heads the US services group, will replace Palmisano as head of the overall services group, according to published reports. IBM Server Group employees here were enthusiastic Monday to hear that Palmisano is coming to their group, saying he would bring a different leadership style from that of Stephenson.

"We're really going to miss [Stephenson], but [Palmisano's arrival] is a great thing," said Brenda Zawatski, director of enterprise systems for the S/390. "Sam's middle name is 'execute.'"

"It's a good thing for us from a parochial point of view because servers are so important," said Patrice Mitchell, vice president of product management and segment solutions for IBM's AS/400 division.

Stephenson, an IBM veteran of some 37 years, broke the news of his retirement to employees today in an email message in which he said he was looking forward to taking a break. The Server Group includes IBM's S/390 mainframes, RS/6000 Unix servers and AS/400 servers. It has had mixed results recently, losing market share to rivals Sun Microsystems and Hewlett-Packard at the mid-range level.