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IBM-HP Rivalry Heats Up: Page 5 of 8

When it comes to corporate computing, IBM makes more of what it sells, including Web infrastructure software and chips for several kinds of servers. IBM says its in-house assets help it shape products for customers in particular industries.

HP has its own network-management software, but mainly incorporates software from other vendors, notably Microsoft Corp., BEA Systems Inc. and Oracle Corp. HP is banking heavily on Intel Corp.'s Itanium server chips, which HP co-developed.

HP says its approach helps customers get more out of their existing equipment instead of forcing them to buy all new stuff.

"IBM is using a page from the playbook of the '70s and '80s, which was: IBM's operating systems, IBM's applications, IBM's services," said Nora Denzel, who heads HP's Adaptive Enterprise service. "Ultimately that play was rejected."

HP says adopting technologies made by others is less expensive. But IBM has made similar bets--it also offers servers with Intel processors and the open-source Linux operating system.