HP plans blade blitz on IBM

Sales force swells


A burst of sales from IBM's blade server division has rival HP rattled and ready to retaliate.

HP recently reorganized its x86 server sales force in the hopes of selling more of the higher-margin blades, The Register has learned. Steps taken by HP include expanding its x86 sales team and having workers focus primarily on blades. These compact servers tend to pad the old bottom line better than standard one- to two-way, rackmount boxes.

An HP spokeswoman declined to comment for this story.

HP was the first Tier 1 vendor to capture any meaningful market share in the blade server market and dominated the segment for a few quarters. IBM, however, managed to quickly pull ahead of HP and now holds the number one position in the blade server market - something Big Blue is very proud of.

IBM sells blades based on Intel's Xeon chip, its own Power processor and more recently AMD's Opteron processor. This lineup has helped the company push sales significantly higher in recent weeks, according to HP's channel checks. Now HP wants to grab back the lost market share.

HP sales folk have been ordered to spend the majority of their energy on selling blade systems. In addition, a flood of staffers has been added to the x86 sales team.

A more bloated x86 server team has to be good news for the hardware folks at HP. Last week, they saw analysts speculate that up to 15,000 staffers could be fired to tighten HP's bottom line. In addition, new CEO Mark Hurd has warned that the server and storage units must be more profitable in the months to come. Hurd vowed to find a way to lower the breakeven point for these divisions.

The x86 ProLiant business HP acquired in its buy of Compaq has been the shining star of the server division in recent years. Strong sales of Xeon-based and now Opteron-based systems, while lower-margin, have countered slow sales of higher-priced Unix gear. Still, our sources say HP has far more sales staff dedicated to moving these high-end Itanium systems than the ProLiant gear.

Perhaps HP is rethinking this strategy and focusing in on what works - the x86 boxes. Does an expanding x86 sales force mean a shrinking Itanic force in the months to come? ®

Related stories

15,000 HP workers get nervous as analyst predicts massive job cuts
New HP CEO coasts through mediocre Q2
IBM outfits blade servers with cheap middleware for the masses
HP's Hurd faces first big test - was the Compaq buy a failure?
IBM server team calls HP 'clueless' and says Unisys's 'days are numbered'
The dual-core x86 server era begins thanks to AMD


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