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Sunday, October 26, 2003

IBM trades jabs with rival HP


Firms fight for clients, but P&G wants cooperation

By Brian Bergstein
The Associated Press

IBM Corp. made a bigger incursion than usual at this year's HP World - a trade show for thousands of Hewlett-Packard Co. customers, equipment resellers and companies whose technologies work on HP computer systems.

IBM traditionally has a booth at HP World to display software. But at the August show in Atlanta, Big Blue urged attendees to depart HP World for a seminar about IBM's own systems.

Meanwhile, IBM marketers drove around the Georgia World Congress Center handing out Lego blocks to brag about the toy company's decision to replace HP computing systems with IBM products.

In a rivalry with big implications for these two U.S. technology stalwarts - and for the companies, schools and governments that spend billions on their products - IBM is doing its utmost to keep HP a wannabe.

HP picked this fight last year when it bought Compaq Computer Corp. for $19 billion, the biggest high-tech acquisition ever. And while there is little sign that HP is close to beating IBM at its own game, IBM isn't taking chances.

It has doubled commissions it pays resellers who oust HP products. And its people portray HP as a bit player in services and software - two-thirds of IBM's revenue.

Even so, HP and IBM had better get used to each other.

In April, Procter & Gamble hired HP to take over its internal tech operations, a 10-year deal worth $3 billion. Five months later, P&G announced a 10-year, $400 million pact to turn over management of its human-resources to IBM.

Each contract required HP and IBM to take hundreds of P&G employees on as their own, which means "both IBM and HP will be working collaboratively in several areas," P&G spokesman Damon Jones said.



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