IBM Hardware Chief To HP's Hurd: We're Server Share King


"Let me make sure I get this on the record," said IBM Senior Vice President and Group Executive, Systems & Technology Group, Robert Moffat in an interview with ChannelWeb. "The stuff that Mr. Hurd said was going away kicked his ass: Z Series [mainframe hardware] outgrew anything that he sells. [IBM] Power [servers] outgrew anything that he sells. So he didn't gain share despite the fact that we screwed up execution in [x86 Intel-based server] X Series. So the rhetoric of buying a services company [EDS] and putting it into your results didn't quite give him the desired effect it may have."

IBM and HP have a long-standing rivalry. Hurd is driving hard to push customers off mainframe computers--an IBM stronghold--and onto HP servers. At the same time, HP's acquisition of EDS pits the Palo Alto, Calif.-based vendor against IBM's giant services business. In addition, HP recently surpassed IBM as the largest supplier of IT products and services in the world after IBM exited the desktop and notebook PC markets by selling those businesses to Lenovo.

"The only reason I go into it with that level of emotion is I think it is important that we get the record set straight on what has happened," said an emotional Moffat. "If we didn't screw up X we would have killed them. But we screwed it up."

HP had not yet commented at post time.

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Moffat's comments come in the wake of IBM's third-quarter earnings report in which its Systems & Technology Group posted a 25 percent increase in Z Series mainframe sales compared with the same period one year ago. At the same time, the group's overall sales were down 10 percent to $4.4 billion for the quarter, with sales from IBM's X Series servers down 18 percent.

The X Series sales drop was not the result of problems with the product line or being outmaneuvered by competitors, insisted Moffat. "We screwed up," he said. "We screwed up execution as a company. We screwed up some go-to-market things. Let me leave it at that.

"IBM did not lose share in the third quarter, did not lose share in the second quarter, did not lose share in the first quarter," he said. "We had a really [poor] X Series performance but we did not lose share."

IBM and HP can both be forgiven for any rhetoric regarding server sales as industry analyst firms IDC and Gartner have trouble agreeing on which vendor is the top server seller.

In November, IDC said HP was the top vendor in terms of revenue, with $3.86 billion in worldwide server sales during the third quarter compared with IBM's $3.81 billion. Gartner, on the other hand, gave the top spot to IBM, which it said had $3.86 billion in worldwide server sales compared with HP's $3.79 billion.

As for overall server shipments, Gartner said that HP by far sold the most servers. Gartner said HP sold more than 724,000 servers worldwide during the quarter, up more than 11 percent compared with a year ago, while IBM finished third with nearly 309,000 servers, well behind Dell's 500,000 server shipments.

Moffat said he has no personal "animosity" toward Hurd. "Some people like being personalities. I don't," he said. "I like solving customer problems. The infrastructure agenda for the industry is about solving customer problems."

"I think Mark has done a good job since he has gone to HP," he said. "I really do."

HP isn't the only one in Moffat's sights. He also mentioned Cisco Systems and Sun Microsystems. As for Cisco, Moffat said the networking giant has decided to "talk about crossing what I call the demilitarized zone between networking and data centers. I find that to be an interesting economic value proposition for them to do." Moffat said Cisco's margin structure will be a challenge for the networking giant.

As for Sun, Moffat called the company the weakest of the competitors. "Sun is the easiest one to talk about," he said. "You look at their technical road map and it continues to change. There certainly is a capability [for us] to win their customers."