Promoted Palmisano in pole position for IBM top spot

IBM has appointed long-standing employee Sam Palmisano to the post of president and chief operating officer, a move analysts claim places him in top spot to be Lou Gerstner's eventual successor.

Palmisano, who joined IBM in 1973, was previously in charge of the $87bn company's server and enterprise storage division and led IBM's push into computer services.

In his new role Palmisano will assume responsibility for IBM's operating units, sales and distribution and global financing businesses. He will report directly to chairman and CEO Gerstner, and the promotion has seen him widely tipped as Gerstner's successor.

Also climbing the IBM executive ladder is John Thompson, who leaves his place at the head of the company's software group to become vice chairman. Thompson will be responsible for developing emerging technologies, including internet, wireless and Linux systems.

Gerstner said the new executive structure would help IBM achieve its goals. "As we enter the next phase of IBM's transformation, we need a new organisational approach that will strengthen our focus on both day-to-day marketplace results and future growth opportunities," he said in a statement.

Martin Brampton, analyst at Bloor Research, said the reshuffle is obvious succession planning from Gerstner. "Its interesting that he's chosen a long-term IBM employee rather than recruiting from outside," he said.

According to Brampton, Palmisano is known for his outgoing personality and could usher in a very different style of leadership.

Mike Thompson, research director at the Butler Group, agreed. "I wouldn't be surprised if Palmisano eventually took over," he said. "He would certainly have the profile, presence and support within the industry. And this is an indication that Lou trusts him."

However, there are unlikely to be any immediate changes at the top of IBM, Butler's Thompson added: "Gerstner has turned the company around brilliantly. And having got the train back on track he is now simply putting the people in place to move it forward."

Palmisano and Thompson take up their new posts on 1 September.