The Best & Worst Managers of 2004

Hector Ruiz, Advanced Micro Devices

As a child in Piedras Negras, Mexico, Hector Ruiz wanted to be an
auto mechanic. As president, chief executive, and chairman of Advanced Micro
Devices, Ruiz has become Mr. Fix-it. When he took over financially strapped AMD
in April, 2002, from the flamboyant Jerry Sanders, few people knew who he was,
despite his long tenure at Motorola.

Nevertheless, the soft-spoken executive has put AMD in the black for the
first time since 2000. He's giving larger competitor Intel Corp. fits with AMD's
hot-selling Opteron server and Athlon 64 desktop chips, and he has set the
agenda for next-generation PC designs. "We're giving customers real
choice," Ruiz says. It's no wonder AMD's shares rose 50% last year
through late December.

Now after grabbing 10% of the mainstream server chip market, Ruiz is pushing
company engineers to launch multiple-core chips, which shrink several processors
into the space of one, by the middle of 2005. Getting the superefficient,
low-heat chips out on time would put AMD at least six months ahead of competing
Intel offerings. Never one to think small, Ruiz has also set a goal to outfit
50% of the world with sub-$200 PCs by 2015.

Ruiz could go a long way toward fulfilling AMD's promising outlook by
cinching another big deal he has labored over: Getting his Texas neighbor, Dell,
to pick up AMD products after years of being an all-Intel shop. If Ruiz manages
that, he could put AMD in the chips for a long time to come.

Joseph Tucci, EMC

Within months of being tapped to run data-storage giant EMC Corp. in early
2001, Joseph M. Tucci got the wind knocked out of him. The dot-com crash sent
sales and profits through the floor and took EMC's once-buoyant stock price
with them. Suddenly the company, a Wall Street darling during the 1990s,
"was going headlong for a cliff," says John McArthur, group
vice-president at market researcher IDC.

Not anymore, thanks to Tucci's deft turnaround. The 57-year-old chief
executive cut costs, reached out to customers, and expanded in software and
services to reduce the company's reliance on sagging hardware sales. In the
first nine months of 2004, revenues were up 34%, to $5.9 bn, and net income
doubled, to $551 mn. Tucci's most impressive move may have been facing up to
the changes roiling techdom. With customers demanding easier-to-use, less
expensive alternatives, he revived a line of modular storage gear that EMC had
inherited when it bought Data General Corp. in 1999. Pushing it through a new
batch of resellers, as well as PC king Dell, Tucci made it one of his
fastest-growing businesses. That's good, because EMC's pricey high-end
machines seem destined for single—digit growth.

Not that Tucci is taking EMC low-rent. To boost margins and broaden EMC's
appeal, he has made almost $4 billion in acquisitions of software companies in
the past 18 months. Tucci is hoping that packaging his range of products and
services together will make EMC an indispensable ally for corporate customers.

Anne Mulcahy, Xerox

Anne M. Mulcahy is not someone who nurtured fond dreams of a desk in the
corner office. Even today, after 3 1/2 years running Xerox Corp., Mulcahy, 52,
seems a little surprised that fate brought her to this spot.

When Xerox' board chose Mulcahy to lead the copier maker back in August,
2001, the company was in terrible shape. It was fighting the Securities &
Exchange Commission over accounting practices, and her predecessor had flamed
out after trying to overhaul Xerox' powerful sales organization. The biggest
problem of all: $14 billion in debt. Bankruptcy was a real possibility. But
Mulcahy proved relentless in pursuing a fix. After making sharp staff and
business cut backs, bringing in a new chief financial officer, and meeting with
innumerable customers, she stabilized Xerox. By the end of this year, its debt
will be down to $9.8 billion.

Mulcahy has spent the past two years trying to move forward again. She faces
tough competition from Hewlett-Packard, Canon, and others. But she has posted
respectable numbers: Though Xerox stock is nowhere near the highs of the late
1990s and 2000, it rose 22% in 2004 through late December, compared with 9% for
the Standard & Poor's 500-stock index. And after meeting earnings
expectations in each of the past 10 quarters, Mulcahy expects new products to
drive a sales increase in 2005-the first for Xerox since 1999.
"Turnaround or growth, it's getting your people focused on the goal that
is still the job of leadership," she says.

Linus Torvalds Open Source Development Labs

Linus Torvalds, a shy 34-year-old Finnish programmer, may seem an unlikely
choice to be one of the world's top managers. But Linux, the software project
he created 13 years ago while a university student, is now one of the most
powerful influences on the computer world. The operating system, built by
volunteers and distributed in commercial and free versions, is popular with
corporations because it's typically cheaper than Microsoft Corp.'s Windows
and offers customers an alternative. And Linux has been causing Microsoft
headaches aplenty. According to market researcher IDC, Linux held 21% of the
server computer market in 2003, compared with 58% for Windows.

Torvalds, now employed as a fellow by Linux trade group Open Source
Development Labs, coordinates the output of a few dozen volunteer assistants and
more than 1,000 programmers scattered around the globe. They contribute code for
the kernel-or core piece-of Linux. He also sets the rules for dozens of tech
companies that have lined up behind Linux, including IBM, Dell, Hewlett-Packard,
and Intel.

Torvalds has quipped that his job is a lot like "herding cats." But
these cats are all inclined to move in only one

Henning Kagermann, SAP

Good management requires smart thinking and crisp execution, but a little
bit of luck doesn't hurt. Henning Kagermann, 57, CEO of software giant SAP,
has had plenty of all three in the past year. Under the steady hand of the
cerebral manager, the company has more than survived the tech bubble-it has
strengthened its position as the global leader in software for accounting, sales
management, and manufacturing. Profits for 2004 are expected to surge 20% over
the previous year, to $1.7 bn, on revenues that grew 6.7%, to $9.9 bn. SAP's
suite of software packages now serves as the central nervous system for more
than 24,500 of the world's largest companies, making it the No. 3 software
company on the planet.

Kagermann deserves credit for keeping SAP's costs in line and hanging on to
budget-conscious customers during the downturn. His task got an unexpected boost
from the protracted campaign by Silicon Valley-based rival Oracle Corp. to take
over software maker PeopleSoft. Many customers were nervous about the outcome,
so they turned to SAP. It helps, too, that under Kagermann, who took over as CEO
in May, 2003, after sharing the job for five years with Chairman Hasso Plattner,
SAP has remade itself as the industry's honest broker. Rather than locking
customers into its own products, SAP offers tools that tie competing packages
into a seamless whole. Analysts forecast revenues will climb another 10% this
year, surpassing Oracle's expected 8% growth. Success like that depends on a
lot more than luck.

In Dallas in BusinessWeek. Copyright 2005 by The McGrraw-Hill Companies,
Inc