IBM cuts prices to win contract

IBM, the world’s biggest computer maker, said it won one of its biggest server-computer contracts this year by charging less than Hewlett-Packard Co.

“IBM didn’t compete on price” in the past, said John Lally, product management chief at Interland Inc., an Atlanta- based company that hosts websites for other companies. “They were really focused on technical specifications.”

Interland now buys about 300 IBM servers a month at prices he declined to cite. Chief Executive Sam Palmisano, former head of IBM’s server and storage business, ordered development of a new server chip and backed the Linux operating system as an alternative to Microsoft Corp’s Windows.