Sam Palmisano, a man tipped to take the reigns of IBM when Louis Gerstner steps down in 2003, has been appointed head of IBM's Server Group.
He will take office, replacing Robert Stephenson who is retiring, at the core computer hardware business on 1 October.
Palmisano, 48, will leave his job as head of worldwide operations at IBM Global Services - the company's largest business.
Prior to this he was senior vice president for IBM's personal systems group, responsible for the company's personal computer, consumer and networking business.
Some industry watchers believe it could be a step down for the man tipped for the top - as IBM's services division is doing so well.
IDC analyst Marianne Kolding said: "I would say that anyone leaving Global Services would be silly as it is IBM's biggest performing unit, but with the acquisition of Seqent it could be an interesting job."
"He has a technical background and the merger with Sequent completed on 12 July will bolster IBM's determination to win in the high end server business, so it's possibly a good thing. Especially as it's strange to demote a man who has done so well."
The man stepping into Palmisano's shoes is Douglas Elix, now the general manager of IBM Global Services Americas, who will be made a senior vice president and take a seat on IBM's Corporate Executive Committee.
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