There's an interesting read by longtime Silicon Valley analyst Rob Enderle published today about how much both HP and IBM have changed over the years - so much so that these days, the two look more like allies instead of competitors.
He says that "massive changes" over the past decade has taken the two companies in opposite directions and that IBM is probably more of a competitor to Microsoft than HP. The landscape has changed quite a bit over 10 years - the technology, the equipment, the backbone infrastructure. HP is growing its services unit with the EDS acquisition while, for IBM, software has become a bigger part of the business.
About HP (see revenue chart from HP's Q1 earnings), Enderle says:
By any measure they are a hardware company that has a strong services unit. As primary competitors they have Sun, which they have pounded into submission; Dell, which they took the PC lead from last year; and every printer company at any level on the planet, which they regularly scare the hell out of.
He calls IBM's software unit one of the major areas of emphasis for the company. (Check out the Revenue-by-Segment chart from the Q4 earnings report below.) Enderle says:
This unit regularly runs up against Microsoft and companies like Oracle and probably wants to partner with HP more than compete with it. Because of the way software is priced and sold, it is largely, at least over the short term, financial storm proof.