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IBM's strategy to lure SMBs to System i cast in doubt

Dividing System i into enterprise- and SMB-focused units was an attempt to acquire new SMB customers. But do IBM application development tools support the platform well enough?

When IBM divided its System i division earlier this year, the shift left some wondering about the future of the platform. Higher-end servers moved into a newly formed Power Systems unit with System p, while the lower-end models moved into a new Business Systems unit all their own. Now IBM observers are pondering the implications of that move.

For more on IBM's System i SMB strategy:
IBM System i filing for divorce

IBM eyes SMBs with entry-level System i boxes

Senior IT adviser Wayne Kernochan at Illuminata Inc. opened his recent report "Whither goes i?" with a reference to St. Peter trying to sell Christianity. When you consider the almost religious-like fervor that some users bestow on the midrange platform, the allusion is fitting. But as Kernochan concludes, it's not the converted that need worry about IBM's System i maneuverings. IBM will preach to them for a long time.

The whole question of new customers, heaven knows.
Wayne Kernochan,
analystIlluminata Inc.

"Past IBM moves haven't made much of a difference for existing customers, and it doesn't look like this one will either," he said.

Kernochan thinks that larger customers will be mostly unaffected by the reorganization because they care more about the platform than do small and medium-sized businesses (SMBs). If they're already on System i, they're likely to stay there. If they're not, they're not likely to move there.

Attracting new customers: A dubious strategy?
IBM's latest move, said Kernochan, is more about winning new converts to the System i platform, and he's skeptical about whether it will work.

"The whole question of new customers, heaven knows," he said. "We've been around this question for the last 15 years. It never seemed like System i was able to get over the hump."

With its new focus on SMBs, IBM will work with a fickle bunch that is simply looking for a platform on which it can run and develop its applications and that is by no means loyal to a single brand, Kernochan said. Since these customers are smaller companies, they often lack the ability to throw manpower at an IT problem. They don't want their systems to suffer from downtime, but if they do, they need a nontechnical person to be able to fix them.

That bodes well for System i because of its legacy as a reliable platform. But the application environment surrounding System i isn't as strong as it could be, Kernochan said -- not the number of System i applications, but application providers' ability to develop on the platform.

"Actually, my sense from customers is that they're generally pleasantly surprised by how many applications System i supports now," he said. "But if you're an ISV [independent software vendor], when you're choosing a platform, you're not only choosing a good deployment platform but you're also choosing a good development platform. How well will the ISVs, and to some extent the VARs [value-added resellers], react to the type of software IBM will offer them on the development platform?"

If you're a developer and you think IBM, you probably think of its Rational developer tools. But Rational is "better suited for highly complex projects than for simpler rapid-development projects typical of SMB ISVs," according to Kernochan's report. Rational's natural fit with larger projects may limit application providers' ability to develop software for SMBs.

"Thus IBM infrastructure software, especially in the development area, has a ways to go before it appeals to SMB ISVs," the report continues, referring to those application providers that use Rational to help develop for IBM platforms "As a result, over the next few years, System i bundles may have difficulty achieving major success in attracting new customers in the SMB market -- that is, until the IBM software story sounds better to SMB ISVs."

Let us know what you think about the story; email Mark Fontecchio, News Writer. You can also check out our Server Specs blog.

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