Palmisano To Replace Gerstner At IBM's HelmPalmisano To Replace Gerstner At IBM's Helm

L ou Gerstner is calling it quits as head of IBM. Gerstner, who turns 60 on March 1, will retire as CEO on his birthday and will relinquish the chairman's post at year's end. IBM's board tapped president and chief operating officer Sam Palmisano to replace Gerstner as CEO.

During his nine-year tenure, Gerstner implemented a strategy that leveraged internally developed technology while building a software and services business that helped IBM regain its status as one of IT's most important--and profitable--vendors. IBM also moved to a Dell-style direct sales model for business PC customers.

Palmisano, 50, joined IBM in 1973 and has been president and chief operating officer since September 2000. Before that, he oversaw the company's key server and storage product lines and helped build the services business. Technology Business Research analyst Bob Sutherland says Palmisano will likely continue in the same direction as Gerstner. "There's nothing that tells me he's a risk taker," he says. "He's known for quiet leadership in much the same way Gerstner is."