Samuel J. Palmisano

Samuel J. Palmisano (born July 30, 1951?)^[1] was president and chief executive officer of IBM until January 2012.^[7] He also served as Chairman of the company until October 1, 2012.^[8]

Palmisano was appointed president and chief operating officer (COO) effective in October 2000.^[9] He was promoted to CEO in March 2002, while retaining the title of president, and named chairman effective January 1, 2003. Palmisano announced on October 25, 2011 that he was stepping aside as president and CEO. He was succeeded in these positions by Ginni Rometty.^[7]

As of 2009 IBM was the largest IT company in the world and 45th largest company overall.^[10][11]

Education and personal life

Palmisano grew up in a large Italian-American middle class family in Baltimore, Maryland. His father owned a body shop.^[12]

As an offensive lineman at Calvert Hall College High School in Baltimore, Maryland he prepared earnestly, studying pregame scouting reports and seldom missed a blocking assignment. He was also a union musician, and once played backup saxophone for The Temptations.

He holds a bachelor's degree in history from Johns Hopkins University where he was member of Beta Theta Pi. He also played football (center, offensive tackle, team co-captain) there, and turned down an opportunity to try out with the Oakland Raiders.^[3][4]

He met his wife, Gaier Notman, a 1969 alumna of Miss Porter's School, at an IBM training school.^[13]

Career

IBM 1973-2012

Palmisano joined IBM in 1973 as a salesman.

From 1989-1990, he served a one-year stint as executive assistant to then-chairman and CEO John F. Akers. During that time Palmisano was seen as a rising star and he had lunch with former chairman Thomas Watson, Jr. once per month. Palmisano afterwards ran the company's Japanese office.

He was appointed senior vice president and group executive of the Personal Systems Group in 1997. He was then promoted to senior vice president and group executive of IBM Global Services in 1998, during the period when IBM shifted its focus from pure technology to embrace outsourcing and other services. He became senior vice president and group executive of Enterprise Systems in 1999 when the systems group drove IBM's move to adopt the Linux operating system.

Before leading IBM Global Services, Palmisano led the IBM strategic outsourcing business and before that he was president of an IBM subsidiary—Integrated Systems Solutions Corporation—which ultimately became IBM Global Services.^[14]

Palmisano was elected president and chief operating officer (COO) effective in October 2000.^[9]

Chief Executive Officer

Palmisano was promoted to CEO in March 2002 and named chairman effective January 1, 2003, succeeding the retiring Louis V. Gerstner, Jr. after the Dot-com bubble bust. While his predecessor had saved the company from bankruptcy by downsizing the work force and cutting costs, and then leading IBM's resurgence with systems integration and services consulting (such as e-commerce), Palmisano's goal was to reestablish IBM as a standard-setting company. He was influenced by the Watsons, the company founders who "always defined I.B.M. as a company that did more than sell computers; they believed that it had an important role to play in solving societal challenges".

Palmisano's mandate was to move into new unique businesses with high profit margins and potential for innovation. This included purchasing PricewaterhouseCoopers Consulting in 2002, so that IBM could go beyond selling computers and software and help customers use technology to solve business challenges (marketing, procurement and manufacturing). During his tenure the company also acquired 25 software companies that specialized in data mining and analytics, so that IBM could help companies and governments to find patterns in web and internal data. Palmisano also prepared the company for cloud computing, originally known inside IBM as on-demand computing, where the center of innovation would be services and software, delivered over the Internet from data centers and connecting to PCs and other devices. In 2008, despite the financial crisis and economic recession , he launched I.B.M.’s Smarter Planet initiative which applies computer intelligence to create more efficient systems for numerous applications including utility grids and traffic management. Although the services and consulting businesses, which then-CEO Gerstner had championed, provided the majority of IBM's revenue, software analytics had higher margins and contributed more profits while also having more growth.^[11]

Palmisano also led the sale of the PC group to Lenovo which closed in 2005. The move was controversial inside IBM at the time, as it had been the inventor of the personal computer in the 1980s, and the PC was one of the few products from the company that was widely used by the masses and created strong brand recognition for IBM. Although it fell behind rivals during the 1990s, that division helped to drive sales of other I.B.M. products in corporate accounts, and its purchasing power helped lower the cost of components for larger IBM offerings like mainframes and servers. The PC industry was still going strong at the time, and as IBM's PC group was profitable and generated around $20 billion USD in yearly revenue, the divestiture resulting in IBM ceding the title of the world's largest information technology firm (by revenue) to Hewlett-Packard, the latter whose revenue had increased due to the acquisition of Compaq in 2002. However to Palmisano, moving to new high-margin businesses meant exiting low-margin businesses like PC manufacturing, plus PC manufacturing was becoming commoditized and offered few opportunities for innovation. It took five years but Palmisano was vindicated from 2010 onwards as the Post-PC era of technology took hold, with smartphones and tablet computers supplanting PCs as the primary computing devices of choice.^[11] Also recognizing that drives were becoming a commodity, he sold off IBM's disk drive business to Hitachi and then signed a five-year deal to buy Hitachi drives.

As CEO of IBM, Palmisano has shifted many development and support positions to emerging markets.^[15]

He was elected to the board of ExxonMobil in 2006. He is also the Honorary Chairman of National Engineers Week 2008.

In November 2008, Palmisano, during a speech at the Council on Foreign Relations, outlined IBM's Smarter Planet initiative.^[16]

While CEO of IBM in 2009, Palmisano earned a total compensation of $21,159,289, which included a base salary of $1,800,000, a cash bonus of $4,750,000, stocks granted of $13,517,401, no options, and other compensation of $1,091,888.^[17]

In 2010 Palmisano was awarded The Deming Cup, an excellence award presented by the W. Edwards Deming Center for Quality, Productivity, and Competitiveness at Columbia Business School, for his ability to drive IBM to new levels of operational excellence and for his role in creating and leading IBM's Global Services business unit.

Palmisano announced on October 25, 2011, that he was stepping aside as president and CEO, being succeeded by Ginni Rometty effective on January 1, 2012.^[7] Palmisano continued to serve as Chairman of the Board until October 1, 2012.^[8]

After IBM

In May 2013 Bloomberg LP appointed Palmisano as an independent advisor for the company's privacy and data standards.^[18]

In February 2016, President Barack Obama appointed Palmisano as the Vice Chairman^[19] of a new White House cybersecurity commission tasked with helping the country better defend itself against and withstand cyber attacks, The Commission on Enhancing National Cybersecurity. ^[20]

References