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IBM tries to motivate users off AS/400

Big Blue's effort to get users to move to new Power5 technology faces many obstacles. But could its major hurdle be that the AS/400 technology is just too good?

TORONTO -- IBM is zealous in its efforts to get AS/400 customers onto the new i5 technology, but the sentiment...

during last week's COMMON user conference was that some long-time users just aren't budging.

If all they want is ham and cheese and you think there's a market for pastrami, what do you do?
Charles King
AnalystPund-IT Research

Although scores of AS/400 users have moved to the iSeries and now i5 technologies, IBM said too many of its customers are still operating on old technology.

iSeries vice president of marketing Cecelia Marrese said these users, for the most part, are dormant and living in the past.

"A lot of our customers just haven't evolved," she said. "Our challenge is to convince them of the value proposition of moving."

These customers represent a huge potential revenue base for IBM, according to experts. They're obviously already sold on the platform, now they just need to upgrade.

Henry Wouda, an iSeries programmer for TUG Canada, a local users group, said he is unmoved by IBM's pitch to get users to upgrade and adds that there is little incentive or pressure to move -- although he probably will upgrade to an i5 within the next three years -- simply out of necessity.

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"We probably would be OK on the older technology, but do we really have a choice?" he asked.

Users do, in fact, have a choice, for as long as IBM continues to support the product -- or some third-party does. But IBM execs said just as the AS/400 technology had to change to drive new business, customers must also if they expect to stay competitive.

"If you don't bring the product forward, if you stand still, the world won't stay with you," said Bill Zietler, senior vice president and group executive systems group. "We're committed to users to keep them moving forward. If you don't move forward, it's over."

Move or lose

Last year, IBM released its iSeries road map, which provides users with information, tools and services to assist them in moving from one system to other, from one language to other. Although the initiative appeared to be well received, it has not yet had its intended effect. Big Blue, however, will continue to push this and other initiatives such as iSeries road shows to educate people about the new technology.

Technical consultant Reese Sukkel said it's vital that a company continually strive to better its technology.

"There's nothing wrong with staying on old technology," she said. "Except it probably means that if the technology is still working for you after all those years, your company isn't growing."

However, some users are squeamish about moving to the i5, the next-generation of iSeries technology based on the Power5 chip. And no wonder. As many integrators who were the first to install the first i5 will attest to, it's an entirely different beast.

Yet to IBM executives, such as Zietler and the recently appointed iSeries general manager Mike Borman, the key word in this effort is "modernization." Upshot: Move forward or lose.

If it ain't broke …

Although the executives clearly drove that point home during the conference, it may still be a hard sell for those customers who installed an AS/400 box eight years ago and haven't had to touch it since. Despite some mind-boggling performance improvements with the i5, many users question why IBM didn't just leave well enough alone.

But analyst Charles King of Pund-IT Research, Hayward, Calif., said IBM can argue that if customers actually thought out their hardware needs, they'd realize there are benefits to upgrade. The hurdle for IBM is that many of these customers are small businesses and typically they have less money to throw at new solutions.

"But by not upgrading, they're simply losing out on the benefits they could get from newer technology."

King suggested, too, that part of IBM's problem could be that it built technology that was just too good.

The degree of sheer passion for the platform is unprecedented and many vendors would kill for that kind of loyalty. But it becomes a double-edged sword, King said, when the response to change is so vociferous.

"At what point does that love of the platform prevent you from moving forward," King said. "If all they want is ham and cheese and you think there's a market for pastrami, what do you do?"

IBM's approach seems to be to continue to offer ham and cheese, but not have it on the menu.

IBM is stuck in the same sense that Microsoft is with NT users or with certain applications, King said. If it does the computing you need, from a business sense, why move?

"The real concern and a question that IBM has to answer is at what point do those customers start costing the company more than they're bringing in -- how long does IBM support them."

Another pressing problem for IBM is how to get more resellers and integrators on board. According to Borman, more than 75% of its some 3,000 resellers are not as well-trained in the platform as he believes they should be.

"[We] don't have everyone looking forward," he said.

Getting them up-to-speed on the new technology will be a major focus of his going forward.

Let us know what you think about the story; e-mail: Kate Evans-Correia, Senior News Editor

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