Yes - Lou Gerstner was a very rare bird as a CEO. He was a consultant who became a great executive, then a CEO, then led a transformation the likes of which he'd advised on as a consultant. What's needed is of that order of magnitude. How do you find folks like that?

As a side note, I really have a hard time figuring out what was it that Gerstner did at IBM. When he started, IBM was the mainframe company. What is it doing today? They say it's services, but what are services? When I did an internship there, everyone I asked just shrugged their shoulders.

When Gerstner stepped in to IBM, they literally had their fingers in just about everything remotely related to computers and usually there was a product. Not just mainframes.. No joke, there were IBM branded type writers(!), floppy disks, joysticks and printer paper. (Effectively a marked up version of a product made by someone else with a logo on it and a very very expensive 'process' behind it that you could order direct from IBM...) He ended all of that, lopped off products, lopped off divisions. He did it in a measured way though. Initially he made IBM a holding company for wholly owned subsidiaries, they got some more leeway (like they didn't have to buy IBM PCs for their work if there was something better) and they got some marching orders to perform and put up numbers. Some companies got spun out, some products just died. You would have to be a real IBMer to truly understand the vastness of the cuts, they had a finger in EVERYTHING.

Services in IBM's parlance are quite often high dollar customizations to IBM products or high dollar custom applications built on top of them or integrating them.

I'm not sure 'services' or a similar concept exists for MS. I hope they do pull in a genius outsider like Lou Gerstner though, I really hope he's/she's willing to make some very tough choices and honestly, I kind of hope that some of MS's better products are spun out in to their own independent companies to fly on their own. Fundamentally, whatever happens, MS is going to change in some ways and while I don't trust them or like them, I really hope it's a positive change that benefits the whole industry.

The other benefit of services is you wind up having a lot of people at the customer sites. Instead of having an expensive salesforce, the customer pays for your salesforce as consultants.

They were mainframes, PCs and Operating Systems. Now they're out of PCs and home operating systems.

They've gotten much bigger on corporate services: They compete with Accenture on large software implementations, and do big EDS style outsourcing projects. In doing this they've shifted away from hardware preferences.

They've also bought many enterprise software packages which lend themselves to implementations and ongoing support.

From a shareholders perspective Gerstner was very aggressive about share repurchases, or giving money back. One problem with big companies is they get so much money that they start wasting it. A company can appear very large and strong, but do nothing for the shareholders, if they're just pissing away retained earnings. (One could argue that Microsoft was guilty of this)

IIRC, IBM are still reasonably big on R&D, aren't they?

Also, investor-wise people were happy with what he did. A thriving company doing i-have-no-idea-what is a better investment than a sinking mainframe company.

IBM is big on R&D in India...and squeezing money out of customers for projects they can't build anymore. I work for Microsoft, I don't want to work for IBM.

I was acquired by IBM and not sure I would want to work for either by choice.

Whatever you think about Microsoft, IBM is just a worse experience from an employee perspective. I did two stints at IBM as an intern, the first in Boca (!!) and the second at Hawthorne. IBM Research is almost dead, with most of the researchers having moved on to academia and Google NYC. I work for MSR(A), which is still a very good research lab and probably the last big industrial one.