Last Tuesday, iSeries General Manager Buell Duncan and members of his management team used an iSeries Nation chat session to describe their priorities for promoting the iSeries over the next year. While the group communicated many of the messages that Duncan delivered at COMMON a week earlier, it added further details about the actions it is taking to position the iSeries as a strategic server for the IT community and, perhaps just as importantly, for IBM.
In his opening statements, Duncan discussed four priorities that his team has adopted as marketing and sales mandates for the coming year. The following paragraphs review what Duncan and his team said about each priority.
- Put greater importance on independent software vendors (ISVs). The executives acknowledged that they need to increase the number of ISVs that support the iSeries and get existing vendors to do more to modernize their applications. To help make this possible, IBM will dramatically increase the number of comarketing campaigns it conducts with iSeries ISVs during the coming year. During the chat, Vice President of iSeries Sales for the Americas Paulo Carvao stated that IBM currently supports around 20 comarketing campaigns with iSeries ISVs, but plans to "at least quadruple" that number in 2003.
- Make bold moves on pricing and packaging. As the management team acknowledged, the GreenStreak promotion has shown that iSeries customers will respond positively to more aggressive pricing and packaging. As evidence of this, Carvao revealed that roughly 1,000 customers in the Americas have ordered GreenStreak boxes. While GreenStreak will officially end in December, the team indicated that other programs will take its place. Though nobody was willing to offer details of future programs, Henrik Schlegel--IBM's VP of iSeries Sales for Europe--discussed a new promotion that lets European customers migrate to a Model 270 for less than $30,000 (U.S.). The team also indicated that they are also negotiating more aggressively on high-end server prices with large customers.
One of the more interesting comments that Duncan made during the call was contained in his response to a customer complaint about high prices for iSeries network cards and storage. While Duncan would not pledge to cut prices on these particular components, he did state that it is reasonable for customers to expect iSeries prices to be increasingly in line with those of comparable Unix servers. The statement was noteworthy given the fact that the iSeries will support AIX (IBM's Unix operating system for its pSeries) logical partitions (LPARs) by the first half of 2004. Currently, many iSeries components cost more than equivalent pSeries components. As such, Duncan's statement may indicate that iSeries component prices could drop to pSeries levels in 2003. This would be a logical preparation for the convergence of the two servers that, as I discussed in last week's article, could take place in 2004.
Another pricing front that the team is working on is how ISVs price their software when running on iSeries LPARs. While IBM is starting to offer subprocessor and LPAR pricing on its own products, ISVs continue to charge customers by processor group even when their software uses a tiny fraction of a server's capacity. In response to a customer query about this problem, newly appointed iSeries VP of Marketing Cecelia Marrese affirmed that LPAR pricing is a key issue that IBM is pursuing with ISVs. While there has been little movement within the ISV community on this issue, discussions I have heard indicate that some vendors will experiment with LPAR pricing during 2003.
- Reconnecting with customers. At COMMON, Duncan admitted that IBM needs to strengthen its ties to iSeries customers and pledged to have IBM employees call every customer over the next year. During the chat session, Duncan let Carvao discuss his plans to contact 60,000 customers in the Americas region on a quarterly basis. According to other IBM sources, these calls will primarily be made by IBM telemarketers, though they will not be sales pitches. Instead, they will be what sources are characterizing as "relationship touches" in which telemarketers will ask both scripted and open-ended questions about each customer's needs. Over the last several years, IBM has developed a well-oiled telemarketing machine for making such calls and converting them into sales leads; it will be interesting to see the extent to which their efforts build relationships as well as build iSeries revenues.
- Extending the iSeries' reliability, availability, and ease of use to more operating environments and workloads. While the team made no new commitments to embrace additional workloads, it stressed that it is putting top priority on its work to more fully integrate and manage Linux and Windows workloads today as well as AIX workloads in the near future. Duncan stated in various ways that his mission is to bring the iSeries' traditional strengths--integration, high availability, and ease of use--to these operating environments. This is a message he intends to promote heavily with iSeries customers and ISVs. Indeed, Duncan offered a preview of his sales pitch by characterizing the iSeries as the "on-ramp to the future" and as the eServer that offers "systems integration without the systems integrator."
While Duncan targeted his messages at iSeries customers and ISVs during the call, it is also clear (at least to this analyst) that he is targeting those same messages at IBM's corporate management team. As Big Blue is gearing up to transform the iSeries and pSeries into a single eServer, one of the biggest issues will be the role that each server's technologies and application portfolio plays on the converged platform. Naturally, the iSeries management team wants its server's role to be fully understood, not to mention appreciated and embraced.
This raises the entire issue of the implications of an iSeries-pSeries convergence for both server brands and its customers. While I believe the convergence will be positive overall for the iSeries community, I also think it will pose significant challenges for both the community and IBM. I'll share those thoughts with you in a future article, so stay tuned.
Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at
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