HP, IBM pushing into SME market

HP, IBM pushing into SME market

IBM and Hewlett-Packard, in separate announcements Tuesday, each used words like "simple," "reliable" and "affordable" to describe how each of their new products serves the small-to-medium business market.

IBM says it is introducing a new entry-level server, the System i Express, with a starting list price of US$7995, that can be shared with up to five end users. Additional licences cost $1250 each. It comes preconfigured with an IBM operating system and IBM database, security and system management software, though a customer could substitute other brands. Previous System i servers started at $12,000, which put them out of reach for many SMEs.

HP, meanwhile, introduced a new storage system, the All-in-One System Storage 1200, which offers three petabytes of storage for $8759. A petabyte is one billion gigabytes of storage capacity. HP calls it the All-in-One line because it stores, shares, manages and protects data.

Both companies say the SME market is lucrative because it gives vendors the opportunity to start a relationship with a company early and continue to sell to them as the business grows.

IBM estimated the size of the SME market for hardware and software in 2007 at $330 billion globally.

But IBM had been priced out of the market, claims Robert Fish, president of Responsive Data Systems, which sells point of sale technology based on the System i platform to businesses, mostly retailers. Fish has tried to sell System i to the many outlets in a franchise chain but found that while the franchisors liked the technology, they knew franchisees couldn't afford them.

"We could never get the corporate blessing because the cost was too high. Now we have a chance go back and show the franchise marketplace that there is a solution they can afford that is reliable," Fish says.

The System i Express is powered by Power5+ processor, which makes it possible for the IBM platform of hardware, processor and software to reach a new market, says Mark Shearer, general manager of System i for IBM.

"Now we are relevant again to small business," says Shearer.

HP's All-in-One 1200 is the fourth in its new line of storage systems aimed at the SME market, which is typically companies with between one and 1000 employees.

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