IBM's China-win claim irks HP

November 17, 2005

For IBM, winning its single-biggest contract in China is something to be immensely proud of, and they are understandably eager to publicize it widely, but rival Hewlett Packard is disputing Big Blue's claim that it seized the deal from HP.

On Thursday IBM announced it has won a deal from the Chinese government to update its computer server system, but claims that it will be taking over the system previously operated by HP are "completely wrong," HP spokeswoman Elizabeth Archibald said.

That claim, however, has not stopped IBM from deliberately choosing to announce its China contract as HP announced its latest financial statement. Moreover, it has stuck by its claim that the deal represents a victory of the IBM system over HP.

"This is a head-to-head win" for IBM, and HP systems will be replaced by IBM's in the near future, a company official said.

IBM stated that the China State Administration of Taxation, which oversees tax collection across the country, will be replacing HP's Superdome servers with IBM's Power5 system only two years after the HP systems was first installed. An IBM spokeswoman said that rather than keeping the recently installed HP system, the Chinese government has chosen to replace the HP servers with IBM's Unix-based system, marking the largest displacement of HP's systems in the company's history.

HP, however, said that while IBM did indeed win a contract from the Chinese authorities, that deal would not replace what HP has already installed, but rather supplement it. In addition, HP's Archibald said that contrary to IBM's claims that HP had installed Itanium-based Superdome systems, it had actually put in 80 systems, including 46 Superdomes based on PA-RISC, which was HP's single-biggest Superdome order.

"This sort of buying practice in China is common, spreading deals over multiple vendors," and not just committing itself to one company, Archibald added.

What there is no doubt about is that major information-technology companies are prepared to fight hard and sometimes even ugly to get ahead in the increasingly competitive market of winning contracts from China, which now boasts the world's seventh-largest economy.

China's tax agency alone is prepared to pump at least $1 billion for its golden tax project to improve its tax management system as the country continues to expand rapidly -- and with it, its tax revenue base. IBM itself expects tens of millions of dollars as a result of its single-biggest deal in China as it places 37 servers across the country.

Meanwhile, Karl Freund, vice president of Unix strategy at IBM, pointed out that his company is investing heavily in making the Power5 system even more powerful, with plans for the development of Power6 and beyond already well under way.

"We've seen revenue growth increase about 36 percent" from a year ago as a result of the Unix system "in a relatively flat market," Freund said, adding that the company has about one-third of the overall market.

Certainly, IBM has a distinct edge over other competitors in the world of high-speed, high-capacity processing servers, not just for commercial purposes but also in the realm of research as well.

According to the annual survey of supercomputers worldwide conducted by the University of Mannheim, the University of Tennessee and the Lawrence Berkeley National Laboratory this month, IBM holds the No. 1 and No. 2 spots among the world's most powerful supercomputers, with the U.S. Department of Energy's Lawrence Livermore National Laboratory in Livermore, Calif., and IBM's Thomas Watson Research Center in Yorktown Heights, N.Y., respectively. Of those that made the group's Top 500 list, over 52 percent were from IBM, while HP had the second-largest share with about 19 percent.

IBM officials declined to comment, however, on whether on not its ties with China have strengthened since Chinese computer giant Lenovo bought out its personal-computer division for $1.75 billion earlier this year, but some industry analysts argue that the deal certainly could not have hurt IBM's chances to win the latest contract from the government.

As for the claims that it won out against HP in China this time around, HP's Archibald said that while the facts were "so wrong," the company still had no plans on if they would take any proactive action to correct IBM's announcement.

Copyright 2005 by United Press International

Explore further: China's Lenovo posts first revenue fall for six years (Update)

Related Stories

Every country should govern its own Internet: China's Xi

December 16, 2015

Every nation should have independent authority over its own Internet, Chinese President Xi Jinping said Wednesday, telling a government-organised conference that "freedom and order" are both necessary in cyberspace.

Beijing authorities use technology in pollution battle

December 9, 2015

Some Beijing residents use smokestacks to predict smog: Smoke drifting gently upward means stagnant air where smog will accumulate, while smoke blowing away from the mountains indicates fresher winds and clear air ahead.

Can voice recognition technology identify a masked jihadi?

January 7, 2016

The latest video of a masked Islamic State jihadist apparently speaking with a British accent led to him being tentatively identified as Muslim convert Siddhartha Dhar from East London. Voice recognition experts were reportedly ...

Recommended for you

Record for fastest data rate set

February 11, 2016

A new record for the fastest ever data rate for digital information has been set by UCL researchers in the Optical Networks Group. They achieved a rate of 1.125 Tb/s as part of research on the capacity limits of optical transmission ...

GPS tracking down to the centimeter

February 11, 2016

Researchers at the University of California, Riverside have developed a new, more computationally efficient way to process data from the Global Positioning System (GPS), to enhance location accuracy from the meter-level down ...

Sneezing produces complex fluid cascade, not a simple spray

February 11, 2016

Here's some incentive to cover your mouth the next time you sneeze: New high-speed videos captured by MIT researchers show that as a person sneezes, they launch a sheet of fluid that balloons, then breaks apart in long filaments ...

Mutual sabotage in parasites

February 11, 2016

Some parasites have only one goal: to develop completely in their intermediate host, await the right time to infect their definitive host and procreate there. Many parasites manipulate their intermediate host's behaviour. ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.