IBM and Its Fall 2010 Marketing Angle
September 14, 2010
I read “IBM’s Big Push to Steal Sales from Rivals”. If the write up is accurate, IBM is slashing prices or buying market share. I am not sure how to position the tactic. Here’s what Business Week says:
Starting this month, Oracle and HP customers that switch to IBM’s latest package of servers, software, and storage, priced at upwards of $75,000, will get trade-in credit and can defer all payments until next year, interest-free. Big Blue also will help finance the cost of taking out a client’s old equipment and transferring the data over to its Power7 system. IBM, which managed to steal 500 customers away from competitors last year, hit that mark in just six months in 2010, says Jeff Howard, the marketing director for Power7. Now it’s hoping the sweetened financing will help keep the momentum going.
How will other companies respond? I anticipate bundling, price cutting, special offers, and quite a bit of love and attention to procurement teams.
What are the implications?
First, I think the companies affected by these tactics, if the write up is accurate, will be second and third tier enterprise vendors.
Second, the bundling will put further pressure on some specialist providers of search, content processing and business intelligence. It takes deep pockets to buy market share Big Blue style.
Third, I think customers may take a closer look at products that may not be free. Deals from giants like IBM often come with an Iron Maiden, a thumbscrew, and foot chains. There is no free lunch in the rough and tumble world of enterprise software.
Stephen E Arnold, September 14, 2010
Freebie
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