HP's Gain, IBM's Pain

By Steven Burke, CRN
May 07, 2007 12:00 AM ET

If you want to gauge which way the channel wind is blowing, CRN's Channel Champions report is the industry bellwether. And this year there is no way to get around it: Hewlett-Packard absolutely dominated the festivities.

To say HP is putting one-time rivals IBM and Dell to shame is not overstating it. The latter two companies are just not the factors they once were in the market.

STEVEN BURKE
Can be reached at (781) 839-1221 or via e-mail at sburke@cmp.com.

Those interested in finding out just why HP is shining and IBM and Dell are fading should take a long hard look at this week's CRN Channel Champions data. In critical areas such as product, pricing and channel programs, HP is beating both companies hands down. HP, in fact, garnered awards across a range of categories, reflecting the breadth of the vendor's technology and services offerings, including being named the Overall Winner in Network Laser Printers, Commercial Desktop PCs, Midrange Servers, Network Storage, Notebooks and SMB/Volume Servers.

IBM walked away with a couple of awards, but nothing compared to its showing from years ago. In fact, the tables have turned.

IBM at one time dominated the Channel Champions awards. But that was before the computer giant sold its PC business to Lenovo. That forever changed the character of IBM, which has always had trouble connecting with the SMB IT space.

The problem is IBM has now completely lost touch with what is the biggest and most profitable segment of the IT market. One IBM partner who attended PartnerWorld last week said IBM simply doesn't get small business. Another said his IBM rep's eyes glazed over when he started talking about small/medium-business market dynamics.

HP is going wide and deep with many partners. IBM is going narrow and shallow with a few partners. What HP Chairman and CEO Mark Hurd has done in a relatively short period of time is cleaned up a lot of conflicting sales motions, instituted some no-nonsense compensation metrics and driven a new level of channel excellence.

That's not to say HP is perfect. It still has a way to go to make sure it is eliminating costly redundant sales motions like CDW's special pricing advantages. That said, Hurd gets it and he's driving his channel strategy forward at the expense of rivals like IBM. To put it simply: HP's gain is IBM's pain.

Do you think the HP/IBM tables have turned? Contact Steven Burke at sburke@cmp.com or at (781) 839-1221.

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