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Starting in the new year, according to IBM sources, the company's Storage Systems Group, headed by Linda Sanford, will be merged back into the Server Group, which is run by Bill Zeitler. Sanford, who is one of the highest ranking women at IBM, will be tapped as the senior vice president of On-Demand Transformation and will be in charge of implementing chairman and CEO Sam Palmisano's vision of autonomic, utility computing.

Last week, as Palmisano outlined his on-demand computing strategy for customers and analysts, he indicated that he would be creating a senior vice president position at IBM to drive that strategy. (For more on this IBM initiative, see "Palmisano Named IBM Chairman, Presents Autonomic Vision.") Sanford is this executive, and it is not the first time she has tackled tough issues and problem spots for IBM.

Sanford will be working with Irving Wladawsky-Berger, a former colleague of hers, as she implements IBM's on-demand strategies. Wladawsky-Berger is IBM's chief strategist and was the main evangelist for Unix and then Linux at Big Blue. He teamed up with Sanford in the early 1990s to push the RS/6000 SP PowerParallel servers, which arguably put IBM on the map for enterprise Unix. In January 1995, Sanford was tapped to head up IBM's System/390 division, which was in the midst of a difficult transition from bipolar to CMOS mainframe engines and would soon start losing big bucks to rival Hitachi. In January 1998, when Palmisano was made chief of Global Services, after Dennie Welsh (who was instrumental in creating the then-$20-billion services unit from the old Integrated Systems Services Corp., a feat that Palmisano is usually given credit for) took medical leave, Sanford became head of IBM's global business industries unit.

In January 2000, Palmisano was named head of the Server Group and the Storage Systems Division in the wake of James Vanderslice's departure from IBM to become vice chairman at Dell. Vanderslice was a senior executive vice president in charge of three IBM divisions at the time: the Technology Group, the Storage Systems Division, and the Printing Systems Division. Shortly after Vanderslice left, Sanford was named to head up IBM's storage unit, a position she has held since then. At the beginning of her tenure, EMC was cleaning IBM's clock in enterprise storage, but IBM had plans for the Shark arrays and related software that would put it back on track. Palmisano became president and chief operating officer of IBM in July 2000, and Zeitler took over as head of Server Group. Now Zeitler takes over storage as well, and Sanford retains her senior VP and group executive title in the new on-demand organization.

Exactly how many people and what size of an organization Sanford will control remains to be seen, but IBM says it will plough $10 billion into its on-demand utility and autonomic computing initiatives over the next several years. It will be up to Sanford and Wladawsky-Berger to build on that vision and put products with prices on them so IBM can make money.

The deck chairs at IBM could soon change again. As we explained last week, chairman Louis Gerstner will step down on January 1, and it would not be surprising to see someone at the top of IBM named as president and chief operating officer to take some of the burden off of Palmisano and to shield him somewhat from repercussions, should a prolonged economic downturn start eating into IBM's revenues and profits.