Business Management

IBM and HP take diverging routes to stay relevant

They were once the Tweedledum and Tweedledee of enterprise IT, duking it out to be the biggest company by revenue and supplying everything from mouse mats to mainframes. Today though, IBM and HP are having to reinvent themselves as a perfect storm of change rains on their parades.

IBM this week said it will buy Blue Box to bolster its stake in OpenStack private clouds. The move complements IBM’s attempts to be at the sharp end of other uber-trends from data analytics, including the Watson initiative, via hosting (turbocharged by the acquisition of SoftLayer), consumerisation of IT (the Apple alliance), security and more. At the same time it has slimmed down by jettisoning its PC and commodity server businesses.

In effect, IBM is reinventing itself for a new era in much the same way that Lou Gerstner made this old elephant dance in the 1990s.

HP, meanwhile, is having to morph again after decades of attempts to usurp IBM as the biggest, broadest IT provider. Slowly, we are starting to see the outline of the new Hewlett-Packard (or, more precisely Hewlett-Packards, plural). Hewlett Packard Enterprise, the corporate hardware and services will be led by current HP CEO, Meg Whitman, who this week showed off the new corporate logo like a general unfurling a flag. HP Inc. will, appropriately enough for punsters, handle printing and PC operations.

For many years, these companies made money from consulting services, hardware firepower and enterprise software, selling to the largest organisations in the world and customers that felt a cosy empathy in snuggling up to fellow giants. Today, the disruptive effects of a series of technology trends means they must go again and find new revenue streams where the old ones have dried up and cracked.

It will be years before we can say with any confidence that they have bounced back. But both parties are taking drastic actions. They retain the resources and, seemingly, the ambition to change rather than become gradually less relevant.


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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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