Thinking Outside the Box

Computerworld - They are the leaders in supplying the hardware that powers the world's information infrastructure. And now all three are turning to software and services to boost margins and growth amid the declining demand for and the growing commoditization of their core technology products.
But IBM, Sun Microsystems Inc. and Hewlett-Packard Co. have recently articulated widely differing strategies for just how they intend to do that.
Today, for instance, Sun is launching a software organization that unites its enterprise software development and software products groups. Sun sees Java-enabled Web services as the area where it can add the most value with its Sun Open Net Environment (Sun ONE) software suite, and it's hoping that the new organization will give it the needed focus.
HP's software strategy, as expounded at last week's HP Software Forum in Seattle, is to help customers manage a heterogeneous infrastructure using its OpenView software suite. The company sees its biggest opportunity in helping service providers and service-oriented IT shops automate and manage key processes such as service delivery, service assurance, billing and usage.
IBM sees gold in the application and business integration hills, which it says represents the most daunting challenge facing IT shops. Through its huge Global Services organization, the company aims to use its Lotus, DB2, WebSphere and Tivoli software and middleware products to help customers integrate applications, data sources, user interfaces and business processes.
The challenge for all three vendors is to present a coherent vision of those strategies to users who have yet to be convinced of their merits.
Indeed, some users, such as Matt Kesner, chief technology officer at San Francisco-based law firm Fenwick & West LLC, have difficulty seeing the value that hardware vendors bring to the software space. "We've been approached by the consulting teams of HP, IBM and Sun, and frankly, we haven't yet found a lot of value in what they have to sell to us," Kesner said.
In Need of a Differentiator
But almost everyone agrees that hardware vendors are going to have to think beyond the box if they want to sustain long-term growth.
The big hardware makers recognize "that you can't make money off selling commodity devices," said Clyde Poole, vice president of the Encompass Compaq user group and a product manager at Tecsys development in Plano, Texas. "Buying decisions [are] less about the underlying architecture and are being driven more by the total cost of ownership" of a vendor's offering, he said.
With core technology becoming less of a differentiator, software, services and integration