IBM And HP Duke It Out For Market Dominance

Now that the top execs of both companies have mapped out their vision, along with the critical role their partner networks will play in the coming years, we have a clear idea where each company stands. Just two weeks before the HP faithful assembled in Los Angeles, IBM orchestrated an enormous conference for its worldwide partners where it carefully positioned the company against HP and took shots at its rival's strategy and technology. Solution providers who attended both meetings were treated to a litany of PowerPoint presentations outlining growth plans, product road maps, investments, incentives and identical market share data that somehow showed each company as the unit or dollar leader. When I figure out exactly how they did that, I will let you know. About the only thing both companies agreed on is their utter contempt for Sun.

IBM chairman Sam Palmisano opened up his event with a rousing, insightful presentation that buoyed the spirits of an already optimistic group of integrators and ISVs. But I left IBM's partner event wondering how the company is going to fuel its ambitious growth goals. It is an enormous question looming over the head of every IBM partner. It was also a point not lost on Fiorina, who turned the phrase this way: "IBM has a growth problem. You look underneath all their acquisitions and all their numbers, they're not growing."

Meanwhile, a more aggressive and focused HP is launching programs designed to steal share from IBM and derail its momentum. Some of IBM's gains came during a period when HP was trying to digest its purchase of Compaq, when its partners were understandably distracted by the merger and by an undertone it would be selling more products direct. Well, most of those issues seem to be behind the company now. Fiorina's speech to partners this year wasn't radically different from last year's, but it did contain one hit-IBM-upside-the-head-with-a-baseball-bat fact. Partner revenue (direct and influenced) accounts for some $50 billion of the company's $73.1 billion in sales. By comparison, IBM racks up $29 billion in channel sales. Fiorina was happy to point out that HP's channel sales are 72 percent higher than IBM's and larger than the combined channel sales of IBM, Dell, EMC and Sun.

So HP's position as the most partner-centric and dependent vendor in the industry remains unparalleled.

While the company's new structure can leave you somewhat confused, partners were comforted by the fact that HP has unified its North American channel programs and sales efforts under vice president and general manger Kevin Gilroy. And for the first time, HP has a worldwide channel executive who oversees its global partners strategy for all of its products: Jim McDonnell, who formerly managed marketing for HP's powerful personal systems group driven by Duane Zitzner. McDonnell joins the likes of Microsoft's Allison Watson and Cisco's Paul Mountford, who exert enormous influence over their company's sales and marketing strategy.

While McDonnell and Gilroy need to fix some elements of the partner operation engine, they also need to move quickly to name the key managers of the new channel organization that HP calls the Solution Partners Organization. Word on that is expected in the coming weeks.

Every executive on Fiorina's team seems confident and relaxed--and there is probably no more dangerous combination. Professional athletes will tell you they play their best when they are loose and self-assured. The same can be said for business professionals. Throughout interviews with the likes of McDonnell, Gilroy, Ann Livermore, Peter Blackmore and Vyomesh Joshi, there was a sense they are enjoying their jobs and settling into the new organization. Blackmore, the company's top sales executive (who could make a fortune doing voice-overs for TV commercials) was flawless at the conference.

For more on HP, Jerry Poch's return to the tech arena and Michael Grainger's departure from Ingram Micro, go to www.varbusiness.com. And let me know if you think HP is better off today at [email protected].