Add Dell to the list of companies courting IBM partners and customers, trying to win their business ahead of IBM's sale of its x86 server division to Lenovo. Last week, Dell reported it has experienced healthy growth in the number of partners and customers that have made the switch.
At its Dell User Forum in Hollywood, Fla., Cheryl Cook, vice president of global channel alliances at Dell, said the Round Rock, Texas-based company's campaign to woo IBM customers -- called "Don't Just Transition, Transform with Dell" -- is driving substantial new business for Dell from servers to storage to software services.
“We have been proactive [in our] marketing and targeting of IBM customers and partners. The statistics show that overall as a result, our server business through the channel is up 30 percent,” Cook said of quarter-over-quarter growth. “When I look at the win rate that we are having against IBM with customers, we are up 3X.”
Dell isn’t the only one trying to grab IBM customers.
In May Hewlett-Packard set out to capitalize on what it saw as uncertainty within the IBM business partner community and launched a "Project Smart Choice" campaign -- offering IBM partners information and resources to transfer their business -- and saying the program was aimed at "rescuing" IBM partners.
Dell’s efforts have been more subdued.
“We definitely are seeing a lift in our business when we are up against IBM in the market as a response to the news,” Cook said. “We are also seeing increased growth in the number of IBM customers approaching us. We are doing what we can to make sure we are getting the most out of this uncertainty.”
According to several IBM partners who asked not to be identified because they did not want to harm their relationship with IBM, Dell has made the transition of their IBM business very appealing. “Dell has been extremely receptive to work with. Their field engagement is very impressive,” said one partner that does more than $100 million in business between Dell and IBM. “The message we are hearing from our customers is they have a zero tolerance for uncertainty,” he said. The partner told CRN that he expects to double his Dell business as his IBM business shrinks to single digits.
Another Dell and IBM partner, who targets the federal government space, told CRN the impetus behind the move away from IBM's server business is twofold. One, there is uncertainty that the transition will include too many speed bumps and hurt business continuity. The second is concerns among many IBM federal partners over Chinese ownership of Lenovo.
“It’s not rip and replace, but it’s new equipment moving forward," said the partner. "That has meant nearly $10 million in sales going to Dell. The problem is real and happening now and will impact billions of dollars in government contracts.”
Dell, meanwhile, said it has experienced 25 percent growth in server revenue in IBM targeted accounts. In federal government vertical accounts, Dell said it is targeting $21 million in new competitive opportunities as a result of the IBM x86 business sale.
“As we hear more public statements from the government over Chinese ownership of IBM hardware after Lenovo’s purchase of its x86 business, we are hearing from more companies that tell us they refuse to go to a Chinese manufactured platform,” Cook said.
IBM declined to comment when reached by CRN, saying it is in a "quiet period" leading up to its earnings, which are scheduled for July 17.
Both IBM and Lenovo have acknowledged that outside efforts by competitors to spread FUD regarding the x86 sale have hurt IBM’s market share. IBM, for its part, has launched its own campaign to help fight the uncertainty called “Winning In Transition,” which includes a dedicated website.
In the fourth quarter of 2012, just before the news of IBM selling its x86 business to Lenovo, IBM was the No. 1 server maker in the world, according to Gartner research data. IBM owned 34.9 percent of the worldwide server market in terms of revenue, followed by HP with 24.8 percent and Dell with 14.3 percent, according to Gartner research.
Today, IBM's market-share lead has dropped 15.1 percent. Worldwide revenue for server makers in first-quarter 2014 show HP's share of the server revenue pie was 25.5 percent, followed by IBM with 19.8 percent and Dell with 17.9 percent, according to Gartner.
PUBLISHED JULY 1, 2014