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Commentary: IT buyers stick with tradition

When the economy turns sour, businesses--like consumers--inevitably become more conservative and return to the familiar.

By Jeffrey Hewitt, Gartner Analyst

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.

See news story:
Dismal server market bruises IBM least
IBM also continues to leverage its strengths as the most recognized brand in IT and as the company that can offer the greatest depth and breadth of service to customers. IBM--and only IBM--can offer service, support and integration capabilities to almost any enterprise almost anywhere in the world, and those capabilities are an even more important competitive differentiator in difficult economic times.

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.)

Entire contents, Copyright © 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.