Commentary: IT buyers stick with tradition
When the economy turns sour, businesses--like consumers--inevitably become more conservative and return to the familiar.
IBM has saved itself from the worst of the distress in the server market by capitalizing on its long-established strengths and avoiding the weaknesses of its main competitors.
When the economy turns sour, businesses--like consumers--inevitably become more conservative and return to the familiar. This virtually universal tendency can only benefit the most conservative and most familiar name in information technology: IBM.
The recent economic downturn has left IT budgets severely constrained and IT purchasers highly risk-averse. The result: Many enterprises are choosing to maintain and upgrade their installed infrastructures, instead of gambling on new and often unproven technologies.
The mainframe market--one of IBM's traditional strengths--is a case in point. Many of IBM's competitors have essentially abandoned the mainframe market, failing to recognize that there is absolutely nothing wrong with mainframes from either a technological or a business standpoint. IBM, by contrast, continues to invest in developing and marketing mainframes, and continues to find the results highly profitable.
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Some of IBM's competitors--notably Sun Microsystems--are working hard to improve both their performance and their image in these areas, but IBM remains one of the recognized leaders. IBM also has strengths in a broad range of vertical industries, some of which have not been affected as adversely by the downturn as the economy as a whole.
IBM has also benefited from the difficulties experienced by some its competitors--notably Hewlett-Packard. The troubled HP-Compaq Computer merger--even if it doesn't go through--offers IBM an opportunity to increase its server market share at the two companies' expense.
Ultimately, however, the most important factor in IBM's comparative success may simply be its established place in the majority of the world's businesses. In tough times, businesses return to what they know--and what they know is IBM.
(For a related commentary on IBM's eLiza initiative, see Gartner.com.)
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