IBM: A New CEO for Its 100th Birthday?

On June 16, IBM (IBM) will mark its centennial. Five weeks later comes a birthday that could be more significant for Big Blue's future: Chief Executive Officer Sam Palmisano turns 60, the age by which IBM CEOs have traditionally named their successors. Who Palmisano ultimately taps to lead the tech giant could go a long way toward determining how much IBM continues the cost-cutting that has marked its recent past or launches into a new era of growth.

On the surface, executive transition shouldn't be traumatic for Big Blue. While Hewlett-Packard (HPQ) and Nokia (NOK) have recently had to look outside their ranks to recruit CEOs, IBM has several qualified internal candidates for the job. Sales chief Virginia "Ginni" Rometty and services head Mike Daniels, both senior vice-presidents, are considered the top contenders to follow Palmisano. (A third candidate, hardware chief Rodney C. Adkins, is considered a long shot by analysts.) "They've mastered the art of developing the next generation," says Dennis Carey, vice-chairman at executive recruiter Korn/Ferry International (KFY), which has done work for IBM. "Now they have the problem of riches, as opposed to the problem of poverty."