Trying its hardest to pull the rug from under Hitachi Data Systems Ltd, IBM Corp is offering Hitachi’s 140 European bi-polar Skyline customers maintenance contracts, with the aim of converting them to IBM 9121 G5 CMOS processors. It’s doing the same in the US, but is keeping more of a low profile. It admits that due to the high cost of a maintenance capability for Skyline it would not normally have gone into this market. But it has reined in the global financing unit to part fund the purchase of development machines through buy-back schemes, the ultimate aim of which is to get access to Skyline accounts and switch them to G5s. The 140 machines represent a significant maintenance opportunity and as of March it reckoned it had won 10 of the 140 accounts. IBM estimated it needed to win only three of the 140 accounts to gain a return on its investment. It claims that even discounting heavily against Hitachi it still generates a 35% gross profit on maintenance contracts.
