HP, IBM Bolster Customer Service, Finance Options

HP intends to invest $500 million to build three centers where customers can test SOA platforms. IBM has agreed to finance customers deploying RFID projects.

Laurie Sullivan, Contributor

September 18, 2006

3 Min Read

Hewlett Packard & Co. and IBM Corp. in separate announcements on Monday said they are prepared to make multimillion dollar investments to support technology deployments. HP intends to invest $500 million as part of a strategy to build three SOA Competency Centers where customers can test SOA platforms. IBM has agreed to finance customers deploying RFID projects.

The opening of the HP SOA Competency Centers in the United States, Singapore and India, brings the company's count to five centers worldwide. The other two are located in Sophia Antipolis, France; and Tokyo.

At these centers, customers can get help implementing SOA technology, as well as feedback on deployments to determine what works and what doesn't.

About 6,500 HP employees support more than 2,500 customers already running or deploying SOA, said to Terri Schoenrock, HP's executive director for SOA.

"We'll continue to make this investment over four years," Schoenrock said. "The market and customers want assistance, and we'll base the investment on our customers needs."

Schoenrock said HP is prepared to increase investments as needed and more companies adopt SOA.

For now, service led industries like financial services, insurance, public sector, telecommunications, retail, and manufacturers in high tech and wholesale distribution are leading adoption, said Ray Wang, principal analyst at Forrester Research Inc.

"Service companies are looking to middleware platforms for two key reasons," Wang said. "The first is to improve integration with SOA, and the second is put their proprietary business practices into a software package rather than being forced into one way of doing business."

IBM also has made investments in SOA, announcing its first SOA Solutions Center more than three years ago. Then in 2005, the company launched the IBM SOA Business Partner Program with 50 businesses enrolled. There are 2,500 active members today.

Expanding financing options for customers deploying RFID projects, IBM Global Financing said Monday it signed a deal with both Symbol Technology Inc., and Canadian subsidiary of AbsoluteSKY Inc.

IBM Global Financing has $32 billion in assets on lease, estimates John Callies, general manager of IBM Global Financing. "We'll probably add in new leases and financing in 2006, between $6 billion and $7 billion," he said. "I know what Symbol and AbsoluteSKY will likely sell, and we'll have no problem supporting their customers with financing."

Callies said it's not unreasonable to assume that IBM Global Financing will finance more than $1 billion in assets during the life of this project, about five years. There's no absolute amount, he said, because it could easily vary between $500 million to $2 billion.

Supplier projects are in flux. Many are scrambling to meet mandates from government agencies like the Department of Defense, or retail stores like Best Buy, Wal-Mart Stores, and others that want to track inventory through the supply chain by affixing RFID tags to case, pallets, and sometimes individual items.

Wal-Mart last week said it will soon add another 500 stores to its RFID project, bringing the total number of enabled stores to 1,000. There are 3,900 locations in the United States.

Although IBM made announcements to finance deals through AbsoluteSKY and Symbol, customers purchasing IBM-related RFID services are eligible for financing, Callies said.

Callies said contacts have been inked with companies in the United States and Europe.

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