IBM general managers play musical chairs

IBM chairman and CEO Sam Palmisano is starting to move around the captains of various business units, writes Timothy Prickett Morgan.

Last week, Al Zollar, who has been general manager of the Lotus unit within Software Group, was tapped as general manager of the MidMarket Server Division within IBM's Server Group - the unit responsible for the iSeries line. Buell Duncan, the former general manager of the iSeries unit, who took that job in October 2000, is now general manager of developer relations at Software Group.

Zollar's appointment as GM of the iSeries unit follows some management shakeups in the iSeries organization as 2002 was winding down. Kim Stevenson, vice president of iSeries marketing operations, and one of Duncan's top execs, resigned to take a job at IBM rival Electronic Data Systems, and John Guido, head of iSeries Sales in the Americas region, also left that job.

Duncan quickly appointed Cecelia Marresse, who worked in IBM's pSeries division in various marketing positions, to Stevenson's post; and Paulo Carvao, who has held several positions within IBM's Latin America sales unit, and in the AS/400 Division before that, was named the new vice president of iSeries sales for the Americas region.

Malcolm Haines, the self-stylized minister of propaganda for the iSeries, returned to IBM in late November, after a 15-month hiatus at Lazy Software, and got back to the job he had had for 25 years: promoting products created by the Rochester, Minnesota, midrange organization IBM set up in 1969 with the System/3, which evolved into the iSeries.

A certain amount of musical chairs is normal (and sometimes healthy) among the managers and top brass at IBM, which is an organization that likes to cross-train its executives in different markets, geographies, and product lines. So it is hard to say that the recent executive appointments in the iSeries organization are a result of the trying marketing conditions that the iSeries line experienced in 2002.

It seems a safe bet that IBM has not been happy with iSeries sales in 2001 and 2002, and that executive changes will give the company a chance to mix things up a bit, and gives it a timeout from the iSeries customer base and its business partner channel, which always gives a new GM the benefit of the doubt and a brief honeymoon while figuring out what to do.

Duncan was arguably the most active and responsive of the many iSeries general managers from the moment he took over the iSeries line in October 2000. At that time, IBM had just launched its "Mach1" eServer rebranding campaign; the company was plagued by shortages of its 64-bit PowerPC processors, the main engines in its OS/400 and AIX server lines; and server sales had just started to dry up in the wake of the dot-com bubble bursting and the slowdown in the economy. This was not an easy environment to push the iSeries.

Early in Duncan's tenure, the Fast400 interactive capacity governor buster erupted into the market and the iSeries line was plagued by disk failures, both of which caused Duncan and his team a fair amount of grief. To his credit, Duncan pushed the adoption of Linux on the iSeries platform, ramped up the logical partitioning capabilities of the machine, and spearheaded a number of pricing actions - including the Green Streak price break that IBM ran from August through December 2002 - that made the iSeries platform more attractive to customers but has rankled a few business partners, who are trying to figure out how to make money with lower-cost iSeries machines.

Before being appointed general manager of the iSeries, Duncan headed up IBM's PartnerWorld marketing programs and was an assistant general manager of the AS/400 division. He also ran various IBM sales and marketing units in Europe.

Perhaps the most significant legacy that Duncan leaves is the open communication he had with customers, partners, and pesky journalists - something that most certainly was not true of prior iSeries general managers. He sets a good example for incoming general manager Zollar, an example that GMs in other IBM product lines would do well to emulate. Though communication is important, however, the most important thing for the iSeries right now is to make bold changes in the way that the machine is packaged and sold, and the indications are that IBM is moving in that direction, as we have pointed out in the past.

This is Zollar's first appointment dealing with complete hardware and software systems and a product that is pushed predominantly through a business partner channel. The move seems like a lateral one, since Zollar was a general manager at Lotus (and was CEO and president of Lotus when that company was distinct from Software Group a few years ago). But in some ways, the GM of iSeries position is a promotion.

The Lotus unit probably brings in between $800m and $1bn in revenue each year (though it's hard to say, since IBM doesn't break out Lotus numbers in its financials), and deals strictly with software. The iSeries line brings in about $2bn a year to IBM and is wickedly profitable; moreover, it is a complete computing environment with a large sales channel and the biggest installed base of users IBM has outside of the Lotus installed base, which, at 80 million seats, is about four times that of the OS/400 user base.

Before taking the helm of Lotus, Zollar, who is 48 years old and is a 26-year veteran of IBM, was general manager of IBM's Network Computing Software Division and was responsible for IBM's push to create Internet infrastructure middleware for e-business. He joined IBM in 1977 as a systems engineer trainee in IBM's San Francisco offices, and he has held several high-level positions since that time.

Zollar was general manager of IBM eNetwork software (this unit created the Host On-Demand products from IBM's former PC division in Research Triangle Park, North Carolina). He was also senior vice president of development for IBM's Tivoli Systems unit, and had various management positions in Software Group's development laboratories in Raleigh, North Carolina, and Santa Teresa, California. Exactly what he thinks of the iSeries and what he intends to do as its caretaker is unclear. But we hope to be talking to him soon about this.

Duncan will replace Bob Timpson, who is retiring after 35 years at IBM. Ambuj Goyal, who was general manager of solutions and strategy at IBM's Software Group, is taking over as general manager of IBM Lotus Software.

Bill Zeitler, senior vice president and group executive in charge of Server Group, characterized the move as a big opportunity for Duncan. "One of IBM's strategic imperatives is to drive open standards and our open middleware stack into every segment of the industry," Zeitler said in an internal memo to IBM employees.

"The most important battle in this effort is winning the commitment of the software development community. The company asked Buell to take on this important mission, and I am very confident that he will succeed. In addition to being an excellent executive, Buell is a passionate evangelist and builder of partner relationships. Buell presided over the eServer iSeries business during a tough period for all of us, but he and his team remained focused on their customers and built a powerful new value proposition for the product."

Zeitler displayed equal confidence in Zollar as the new GM of iSeries. "As iSeries becomes the premier on demand system for the mid-market with a complete integrated middleware stack, I am completely convinced we have a winning play. And I can't think of a better leader than Al to take us forward."

Copyright © Midrange Server, Inc. All Rights Reserved.