HP Puts IBM On Notice


Readies incentives to capitalize on uncertainty over IBM PC unit sale


Hewlett-Packard is set to launch within days a PC rebate program designed to wrest market share from IBM in the wake of Big Blue's pending sale of its PC business to Lenovo.

HP, Palo Alto, Calif., revealed its intention to capitalize on the uncertainty created by the sale in an
e-mail sent Dec. 17 to solution providers by John Thompson, HP's vice president and general manager, Americas Solution Provider Organization.

"In light of questions raised by the sale, IBM customers may look for alternative vendors for their PC--and possibly Intel server--products soon," Thompson wrote in the communication to partners.

In urging partners to woo current IBM PC customers with alternative solutions built on HP products, Thompson added, "Coming very shortly, look for aggressive promotions and incentives, targeted demand-generation campaigns, and transition tools for partners and end-user customers."

Thompson didn't immediately provide details regarding any potential HP incentives in his e-mail.

However, an HP spokesman said the incentives likely will start emerging early this month and should include specific rebates that reward HP partners for competitive wins against IBM.

Armonk, N.Y.-based IBM reached a definitive agreement to sell its PC division to China-based computer vendor Lenovo Group last month in a deal that will effectively create a separate $12 billion PC company positioned to compete against HP and Dell.

Stephen Ward, currently IBM senior vice president and general manager of the IBM Personal Systems Group, will serve as the CEO of Lenovo following completion of the deal. Under the agreement, IBM-branded PCs and ThinkPads will continue to be sold through existing IBM channels, including about 7,000 IBM PC business partners in the United States.

Rick Chernick, CEO of Camera Corner/Connecting Point, a solution provider in Green Bay, Wis., said HP is smart to go after IBM with PC-related incentives.

"There is so much uncertainty regarding IBM and Lenovo," Chernick said. "I am hearing from concerned customers [who are showing a] desire to at least speak to HP now."

IBM, for its part, said last month that it has no immediate plans to increase incentives to solution providers beyond those already in place, although it will keep close tabs on its partners through the transition.

Ravi Marwaha, vice president of worldwide sales at the IBM Personal Systems Group, who will become Lenovo's vice president of worldwide sales after the deal is done, told CRN shortly after the sale was announced in December: "We have already planned out our fourth quarter. We have worked out exactly what we need to do in terms of incentives. These incentives are working. We intend to stay that course. But like in any good sales organization, in consultation with our partners, if you think the marketplace needs some stimulation, we will go do it."

In his letter to HP solution providers, Thompson said that many IBM customers might worry about continued product innovation, global support and supply chain issues, and service and support following the Lenovo acquisition. He said that these concerns should create opportunities for HP and its channel partners to gain access to these accounts.

"You have the unique opportunity to position HP to these customers as the best alternative," Thompson wrote.