EDITORIAL - Take the money and spend

In a week when companies and the government spent billions of pounds, IBM and Dell won hands down. As with all other things US, their wedge was bigger than anyone else's. That said, the channel will survive, even if speculation proves right and IBM's PC business doesn't.

The fact that the two rivals splashed out $16 billion between them does, in our opinion, indicate that PC rivalry is being pushed aside to usher in an era of taking the money and withdrawing gracefully.

IBM has denied all talk of pulling out of the PC game, but with Dell breathing down the neck of IBM's number two position in the PC chart, it makes sense to look for alternative business. IBM's withdrawal from the PC game anytime in the near future would not be welcomed by the channel, especially if Dell - and even worse, the Dell sales model - were to become even more prominent.

Siemens and Alcatel have also been spending billions. Siemens, amid rumours that it's planning to jump between the sheets with 3Com, has spent $1 billion to launch its Unisphere comms operation in the US, hoping it can refresh the parts other network providers can't reach. Siemens would do well to take on 3Com to close the gap on Lucent and Nortel, but there would be upheaval in the channel if it took hold of the reins. Telecoms carrier Alcatel is also suffering paranoia about the future convergence of telco and networking technology because it has just spent $2 billion on enterprise networking outfit Xylan. That said, Xylan's UK distributor, Azlan, has said nothing will change.

The last group to enter the IT billionaires' club last week was our very own Labour party. The budget has come and gone and the only group completely crushed by it seem to be smokers.

While they were singled out for a massive inflationary leap, technology was handed a big bag of cash. Right now, those in small business and education are wearing Cheshire cat grins and wondering how best to take advantage of the tax cuts and the #1.7 billion handout for technology.

Clever resellers will by now be doing their Fagin impressions, rubbing their hands together and also wearing big grins, albeit greedy ones. And why not? If the government is to fund a massive IT spend for education, there's no reason not to be at the front of the queue when they start dishing out the contracts. Considering how much has been done in the budget for small businesses, the SME sector can do nothing but grow. In a year where economic gloom is the mood, it's good to know that not all things about a budget stink.

See budget feature, page 24.