International Business Machines Corp is expanding discounts to entice Dell Inc customers and has formed a 100-person sales team targeting the competitor's clients.
Dell customers switching to IBM can receive as much as 15 percent discounts on some server computers, said Christopher Rubsamen, an IBM spokesman.
The company has been matching prices with Dell on other machines for more than a year.
IBM avoided price competition until companies began cutting spending on computers, software and services about two years ago.
The discounts come as Dell tries to expand beyond the consumer personal-computer market to compete directly with IBM in servers.
Dell said shipments of servers, the fast computers that run corporate networks, Web sites and e-mail systems, rose 27 percent in the second quarter.
"It doesn't surprise us that any competitor is interested in Dell," said Bruce Anderson, a spokesman for Round Rock, Texas-based Dell.
"We've had double-digit percent server growth for the last 22 quarters in shipments," he said. That's phenomenal."
Shares of IBM, the world's No. 1 provider of computer services such as running Web sites, rose US$1.73 to US$83.52 at 4:01pm in New York Stock Exchange composite trading. Dell rose US$0.87 to US$33.21 on the NASDAQ.
IBM leads the worldwide server market when measured by sales and trails Hewlett-Packard Co and Dell in unit shipments, according to Gartner Inc.
The latest IBM offering applies to the X440 and IBM "blade" servers, machines that use less space and electricity.
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