IBM Primed For HP Inventory Woes

Incentives in place to win over accounts

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IBM channel executives said they anticipated inventory problems at Hewlett-Packard and stepped up incentives for solution providers and distributors to switch HP accounts to IBM.

"We kind of anticipated this situation [with the SAP inventory system conversion] so we've been fairly aggressive with programs for partners to switch," Greg Adams, IBM's vice president, Americas Business Partners, said at CMP Media's XChange Conference in Chicago.

IBM about 60 days ago put in place incentives for its distribution partners to stock more inventory and added sell-through incentives for IBM partners grabbing HP accounts. IBM also told Business Partners that were unable to fill outstanding HP orders because of product delays that it would match the HP special bid prices on equivalent IBM products.

John Guido, IBM's vice president of management and strategy, Business Partners Americas, said it was too early to gauge the specific results of the incentive program. IBM, Armonk, N.Y., did not have any estimate on accounts it may have won as a result of the initiative. But Guido noted that the close to 200 HP and Sun Microsystems solution providers IBM recruited to carry its product line over the past 18 months have doubled their IBM business. "Eighty percent of that growth is incremental to IBM," he said.

Sun, Santa Clara, Calif., also said it was taking advantage of the problems in HP's enterprise business that prompted the firing of its two top enterprise server and storage executives, Peter Blackmore and Jim Milton. In a new program called "HP Away," HP customers who move to Sun servers won't have make any payments or pay any interest until 2005, the company said. Sun hopes to capture $200 million in new revenue from current HP customers.

Many solution providers have said HP has lost ground to arch-rival Dell even in channel accounts.

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