Mike Borman Lands the CEO Job at Avocent
July 28, 2008 Timothy Prickett Morgan
Here’s a name that you will recognize: Mike Borman. No, he’s not the Apollo astronaut and former chief executive officer at Eastern Air Lines, but rather the former general manager of the iSeries division at IBM and now the new chief executive officer at systems management product maker Avocent.
Borman was named general manager of the iSeries division in July 2004, and took a bunch of heat at the COMMON midrange user group meeting that fall and made a series of commitments to listen to iSeries shops, improve the product line, and do a better job selling the box. In yet another reorganization that followed only a few months later, Borman, who also briefly ran the pSeries Unix server division, was tapped to run the 15,000-strong sales operation of Big Blue’s Software Group, a position he held until he moved to Avocent on July 15.
You probably have heard of Avocent, and you might even have some of its products–KVM switches and various systems management appliances and software tools, mainly DSView–running in your data center. The company is the result of the merger of several different companies, and is headquartered in Huntsville, Alabama; it has 1,800 employees and is a publicly traded on the Nasdaq stock exchange. In the second quarter ended June 30, Avocent posted sales of $159.2 million, up 6 percent, with net income of $3.4 million, down by 77 percent.
You can see now why Edwin Harper, Avocent’s chairman, was eager to get the news about Borman coming on board out there ahead of earnings, which were announced on July 17. Even with the earnings decline, Avocent’s stock has been climbing this year, but has yet to hit the $40 per share highs it hit in early 2004 and late 2005; the stock was almost as high in late 2006, and as we go to press is just over $23 a share. That gives Avocent a market capitalization of just over $1 billion. IBM’s Software Group, by contrast, had sales of $5.6 billion in the second quarter, and if you allocate market cap based solely on revenue distribution (profit is probably a better way, but we don’t have those figures), then Software Group would have a market capitalization of $37.3 billion–about a fifth of IBM’s total market value as we go to press on Friday. Obviously, Avocent is a much smaller business.
This is not the first time that Borman has left IBM since becoming a programmer for Big Blue back in 1977. During the dot-com boom, Borman left to become CEO of Blue Martini Software, a maker of customer relationship management software that was hit hard by the dot-com bust. In October 2002, Borman resigned from Blue Martini and in January 2003 came back to run IBM’s PartnerWorld business partner organization, which tried to herd, inspire, and support the company’s 100,000 partners. The reason I bring this up is simple: Bill Zeitler is retiring next week as the general manager of Systems and Technology Group, and eventually, IBM president, chief executive officer, and chairman, Sam Palmisano, has to retire. Borman is one of the most seasoned IBM execs out there, and at 53 he is young enough to take the helm at IBM, which has a traditional retirement age of 60, but is only three years younger than Palmisano, and therefore is probably not in line for the job. Some hotshot executive in his or her late 40s is probably rising up through the ranks and moving toward the job, and it would not be surprising to see Palmisano revive the traditionally separate president and chief operating officer position to anoint his successor before 2010 is done.