by September 6, 2005 0 comments

The field is exactly the same as last year, with Sun dropping out of the Club. HP-Compaq wins, IBM is second and Dell comes in third. HCL brings up the rear with 15 index points. Let’s now look at brand loyalties.The loyalties are strong for all except HCL-20% of their customers wanting to move to IBM. HP-Compaq seems to enjoy maximum confidence, with respondents currently with Dell, HCL and IBM wanting to switch over. This is closely followed by their nearest rival, IBM, with a similar trend. This trend though is different from what we saw in 2004. Last year, Dell enjoyed just 83% loyalty-up this time to 95%. But more of their customers want to move to HP (2% more) this time. HP has convinced their wanna-be IBM movers to stay on-a mere 8% this time, down from 2004’s 12%. Right from the very beginning, organizations were using desktop class machines as workgroup servers. To add to that the category is fast becoming commoditized with price being about the only significant issue. HP seems to have understood this very well and has managed its offerings accordingly.

Even as our survey was on, HP was advertising desktop class configurations as part of their server range. While we do not want to get into a discussion on whether that should be done, the strategy seems to have paid HP rich dividends, and in the final analysis, one guesses that is what counts. Where will commoditization take the server? In the case of PCs, we have seen the rise and now the decline of the assembler’s share of the total pie. In the case of the workgroup server, the assembler’s share never reached the same proportions, so perhaps this is a moot question. Another question to ponder is whether the current drive towards consolidation will make a dent in the size of the workgroup server market? Our guess is that the size of the market is too large and the consolidation wave is still in its early days for an impact to be felt any time soon.HP and IBM saw a consolidated cross-country market share that was also strongly reflected in the industry-wise breakup. However, HP needs to bolster its growth in the west zone where IBM is stronger by 20%. Both HP and IBM see a close fight in the east zone. Except in the ITES/BPO sector where Dell enters the fray, the buying question seems to be “HP or IBM”. If you compare these with last year’s figures, you’ll notice that IBM, Dell and HCL have reduced points this time. IBM has dropped (marginally) from 77 to 70 (index points). Dell comes from 22 to 16 and HCL from 20 to 15. Where did the customers go?

Shift (%) 2003

Looking at the 2004 loyalty matrix, we can only conclude they went to HP, who seemed to have also gained from Sun’s drop out of the Club. Over the years, HP has remained the strongest in this category. In 2003 they had 85% customer confidence, with customers from everyone else (except PCS) preferring to move to them in the future. That perception came down to 81% last year and this time is up to 91%.

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