Trash talking between vendor isn't all that new, but we rarely get to see a vendor convincingly back up those claims.
An internal memo penned by Al Zollar, IBM general manager for Tivoli Software, claims that IBM has displaced Hewlett-Packard software in 180 head-to-head engagements in the past year, contributing to a 240 percent increase in revenue for IBM's Tivoli group. In contrast, Zollar points out that the HP Software group reported a 16 percent decline in revenue in the fourth quarter.
When it comes to software, the comparisons between HP and IBM are not necessarily apples-to-apples. IBM has a much bigger portfolio, while most of HP's software revenue comes from systems management. But clearly, IBM has a special focus on a campaign to surround and contain HP software by bundling as much software into a deal as possible. In addition, IBM is more aggressive about pushing into cloud computing using its software portfolio as a base.
HP, of course, is not likely to take this lying down. The question is: Just how will HP respond? It is not the only company that needs or wants to expand its software portfolio. Every time HP gets near a software acquisition, it has to think long and hard about not only about IBM outbidding for it, but also what Oracle and SAP might do.
Traditionally, HP has been able to count on a vast army of software partners to thwart IBM. But many of those key partners have been acquired in recent years, and now Oracle, a key HP software partner, will be pushing Sun hardware as an alternative to HP.
IBM is already at war with Oracle, and has enlisted SAP as a key ally in that battle at HP's expense. IBM has also gained share in the server space at HP's expense. So the big question now is: Does HP have the wherewithal to withstand a major escalation of the long-standing trench war between the two companies now that HP is showing signs of weakness on several key fronts?