Passing The Tech Torch: Who Will Run? Stumble?

Technology has become a pervasive part of our lives, but it’s easy to forget that this is still a very young industry.

In fact, many of the entrepreneurs who built the tech industry are still around.

As these firms mature and their leaders age, some have done a better job than others at building a solid line of succession.

But companies in the fast-paced tech world can’t afford much of a slowdown in the wake of a sudden leadership change.

You might say tech faces a similar situation to the music industry, which has been inept and clumsy in its inability to create new stars.

Many of yesterday’s still-performing rock stars now qualify for AARP cards, if not Medicare. Just as The Rolling Stones, Pink Floyd and Aerosmith go gray, so do Gates, Jobs and Ellison.

The question now is, will these companies get the equivalent of a Kelly Clarkson (true talent) or an Ashlee Simpson (no talent) to replace them?

The baton at Microsoft  was passed very gracefully to Ray Ozzie, who, like Gates, is 50 years old. And while some question whether he has Gates’s gravitas, no one doubts his technical smarts.

With other companies, the succession varies in smoothness.

Who’s on Deck at Apple?

Some of the Apple  faithful are in a near panic after the Worldwide Developer Conference. Several reports noted that Jobs looked looked in ill health on stage and seemed to lack energy.

Jobs had a highly publicized bout of cancer two years ago and his appearance led to all kinds of speculation about his health.

Some of his lieutenants were on stage with him for the show, and it was obvious to anyone there that these guys are no Steve Jobs.

Then again, no one is.

“You can’t replace Steve Jobs. He IS the face of Apple. They’d have to hire Bill Gates to replace him,” joked Brian Sozzi, retail analyst for the firm Wall Street Strategies.

Creative Strategies analyst Tim Bajarin chalks up Jobs condition to stress over the stock options mess Apple is in, and feels that, should something happen to Jobs, he has capable lieutenants.

“From a technical standpoint, you have guys who could carry Steve’s vision out should something happen to him. Again, Steve himself is Steve Jobs and it would be impossible to replace Steve in the context of his role of chief champion, movie mogul,” he said.

Apple does have good leaders in Phil Schiller, senior vice president of worldwide marketing, Tony Fadell, senior vice president of the iPod division and Bertrand Serlet, senior vice president of software engineering.

All have been with Apple long enough to know what Jobs wants.

But analyst Rob Enderle thinks there is no real clear successor to Jobs, which puts Apple in a bind because the firm is so solidly associated with him, whereas Gates stepped back in recent years.

“We saw Apple without Jobs, it was a train wreck. The problem is, because the company has become so closely aligned with the individual, it’s hard for us to imagine the firm surviving after the individual is gone,” Enderle said.

“So it’s hard for a corporation to come up with an heir, and that’s a problem because a corporation is supposed to be immortal,” he said.

Does The Oracle See An Heir In Its Future?

The other company in a questionable situation is Oracle . During the 1990s, it had a fairly deep bench of respectable executives, but when Ray Lane left in 2000, the dominos started to fall, leaving Ellison pretty much alone at the top.

Ellison’s love of fast cars, jet fighters, sailing and womanizing are a thing of Silicon Valley legend.

“Larry takes a lot of risks. He’s not dying from old age or cancer, something else is taking him out first,” joked Enderle.

However, Bajarin notes that Charles Phillips, the company president, is a major Ellison confidant and understands Ellison’s vision.

Phillips was also instrumental in many of Oracle’s recent big acquisitions.

“So while [Larry] is irreplaceable, there are some incredibly strong people underneath him who could step in and keep the company moving forward,” he said.

Oracle had an ideal heir in its ranks at one point:  honcho Marc Benioff, who was an Oracle vice president by his mid-20s.

The potential for Salesforce-type services with Oracle’s resources behind it sounds incredible on paper, but there was simply no housing those two egos in the same building. Or city.

Also, is in the same boat as Oracle, Enderle noted.

The loss of Benioff, one of the most forceful champions of software-as-a-service, would be a severe blow to the company, as he is firmly identified with the company and its mantra.

The Chips Aren’t Down

Intel  and AMD  have one thing in common: they both have relatively new CEOs who are considered better than their previous ones.

And Paul Otellini was promoted from within to the top spot at Intel, an increasingly rare phenomenon.

According to a recent article in Business 2.0, only three to four percent of Fortune 500 companies hired outsider CEOs in 1980. Today, that number is close to 40 percent.

While Otellini cleans up the leftover problems from the Barrett years, he has very strong lieutenants in Andy Bryant, Sean Maloney, Anand Chandrasekher and Pat Gelsinger, plus numerous vice presidents.

In the case of AMD, Hector Ruiz came on board in 2000 after 22 years with Motorola and has taken an also-ran company with potential and given Intel fits.

Like Intel, AMD has a good bench of veterans in President and COO Dirk Meyer, senior VP William Edwards and executive VP Henri Richard.

Other Players

IBM  may have brought in a cookie man (Former Nabisco exec Lou Gerstner) to turn things around, but following his retirement in 2002, it promoted Sam Palmisano, one of its own, to the CEO top spot.

Palmisano’s elevation came after 30 years with the firm. Below him is a broad spectrum of capable executives.

“IBM has incredible depth. It does the most systemic job of training people, moving them across divisions to give them a broad area of responsibility,” said Tom Kucharvy of Ovum Summit.

He also said IBM is a very popular source for firms looking for executive-level talent, like CA , which hired John Swainson away from IBM recently to be its CEO.

At Hewlett-Packard , Mark Hurd was brought in because the company needed a former CEO with a track record (which he had as head of NCR) who could hit the ground running. Hurd’s performance has been widely lauded.

Hurd also has two excellent lieutenants in Ann Livermore, executive vice president of the Technology Solutions Group and Vyomesh (VJ) Joshi, executive vice president of the lucrative Imaging and Printing Group.

“Either Livermore or VJ could step in. Whether they would be the right ones to continue the operational drive would be somewhat of a question,” said Bajarin.

Also in strong shape is Dell.

Much as Bill Gates did years earlier with Steve Ballmer, founder Michael Dell handed over the CEO reins to Kevin Rollins. Dell could also step back in if need be.

But Enderle doesn’t see much need.

“They have a bench and they’re demonstrating that. They have old timers from Sony and HP. That place is sprinkled with execs who could move into the lead role,” he said.

Sun Microsystems just finished a CEO handoff, so new head honcho Jonathan Schwartz isn’t going anywhere anytime soon.

In any case, he’s got a capable backup. Co-founder and former CEO Scott McNealy is still at the company and could step in short term if needed.

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