Palmisano, 51, joined IBM as a sales rep in 1973 and was appointed president and chief operating officer in 2000. Before that, he oversaw IBM's server and storage lines and helped build its services business. Among Palmisano's recent accomplishments as CEO are the acquisitions of PricewaterhouseCoopers Consulting and several software companies. He's also overseen the pending sale of IBM's hard-drive business, a major realignment of its microelectronics units, and the outsourcing of desktop manufacturing, according to the company.
The exit of Gerstner, 60, wraps up one of the greatest leadership stories of modern business. Gerstner left RJR Nabisco Inc. in 1993 to accept the CEO job at IBM, and he's largely credited with reversing the company's downward slide, implementing a strategy that helped it regain its status as one of the computing industry's most profitable and powerful players.