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Blame it on inertia: Why IBM cant market the AS/400 with gusto

Sure its an old story, but AS/400 professionals continue to express their disgust and bewilderment over what they say is IBM's lack of commitment to the AS/400. Veteran AS/400 loyalists speak out in this exclusive virtual roundtable about why they think IBM's inability to market the AS/400 is making their jobs increasingly difficult and could eventually put the AS/400 out of business.

Sure its an old story, but IBM Corp.s lack of commitment to the AS/400 continues to be a sore spot for users. Despite IBMs attempt to ward off such sentiment during last months Spring COMMON User conference in San Diego, frustration continues to mount as AS/400 loyalists fear their beloved server will get squeezed out of the market by products marketed by the likes of Microsoft Corp. and Sun Microsystems, Inc. discussed IBMs commitment to the AS/400 with two veteran AS/400 professionals. Burke Allen is president and CEO of NovoLogic, Inc. in Lawrenceville, Ga., an IBM and Lotus Business Partner that focuses on e-business integration services centered on the AS/400 platform. Steve Croy is manager of technology at Seta Corp., a jewelry catalog company based in Boca Raton, Fla. Both professionals agree IBMs lack of interest in the AS/400 could ruin the server but says Big Blue just cant manage to get out of its own way and do the right thing.

SEARCH400.COM: Are you satisfied with IBMs support of the AS/400-technical, marketing or otherwise?

ALLEN: Technical support has always been good. Marketing support has always been horrible. Although its getting better, its still not even adequate. I dont know, perhaps they're [IBM] holding off to see what theyre going to do with their server strategy. Whatever the reason, they dont like to brag about it [AS/400]. Thats the frustrating part.

CROY:They have technical support. Its a solid platform that doesnt create technical issues. As long as I can remember, IBM has had marketing support for the AS/400 in the South Florida area [where I live]. They closed every store in the area and now the only place to get marketing support is in Orlando, which is about 400 miles away. Thats the commitment to AS/400 marketing?

SEARCH400.COM:Its such an old story, though, users whining about IBM not paying attention to them. Its a good solid machine, why cant it sell itself?

ALLEN:History has dictated that is has taken care of itself. The danger is in always assuming that you dont need to market your product because its so good. Other companies understand that there are new generations of people who dont know about their products. So, they continue to market with a vengeance. Thats the fear with the 400. All of us grew up with and love the 400 and are faithful to that brand. There are people coming out of college who dont know about it. Theyre getting bombarded from other companies about their products and unless theyre made aware of this [AS/400]; product as well, it doesnt make any difference how good it is.

CROY: I think Burke nailed it. Why should the United States Post Office advertise? Theyre a protected monopoly. But, they still advertise their services with gusto. Why would they do that? IBM has good products and services and one of the most sophisticated operating systems in the industry, why wouldnt you want to advertise it? It makes no sense not to advertise it. At a recent user group here in South Florida. I made the observation that there was no one under the age of 35 in the room. Wheres your new talent? Where do you go looking for that talent if its not going to be produced in college? Once again it makes no sense to have a product out there thats the greatest thing since sliced bread if no one knows about. Who does it serve to keep the general public in the dark?

SEARCH400.COM: Does IBMs lack of support go across the board - marketing, online support, technical support - or are some areas better than others?

CROY: Its not across the board. IBM is seeking a new focus for their box. Thats why theyre focusing on the server as an e-business tool. In the meantime, theyre disregarding the captive market they already have--people who have a lot of money and time invested in applications and applications development that can ill afford to hop to a new platform. Those people are being given short shift. IBM desperately seeks to crack the server market where they would like to be the major player. But the AS/400 is not a 24x7 box and it seems to me that theyre pursuing a market they really cant service at this point in time. If they are successful in grabbing that marketplace [e-business], what little support we have on the traditional AS/400 is going to completely evaporate. At another recent user meeting we were told that IBM isnt spending development money on RPG. Theyre spending their money in the Toronto lab on Java. This is good for new clients, but it doesnt do a damn bit of good for existing COBALT or RPG shops. I think that lack of support is a marketing decision, not a technical one.

ALLEN: I think thats the biggest problem and not an easy one to solve. Instead of letting them compete vigorously even among themselves and find out what platform is the best platform, theyre preventing it. Its been a conscience decision [on the part of IBM] to not market the AS/400 as heavily as they could be because its one of the better technologies-for fear of alienating the other server groups.

SEARCH400.COM: Its obvious that the Magic Box campaign was a failure. Was it a good idea but bad timing? Was it a good idea but implemented poorly? Or, was it just a really bad idea?

ALLEN: Part of it was a good idea. Part of it was just building brand awareness in an attempt to expand all their server lines. The problem is they didnt follow that up with targeted marketing campaigns for each of the specific platforms. Open up any magazine not published by IBM and how many ads do you see for AS/400? Most of the time, youre lucky if you find a single ad.

SEARCH400.COM: But, you do see ads for other IBM products?

ALLEN: Yes you do. But, to me, if I were heading my business on an RS6000, Id still be upset with IBM because they dont even advertise the RS6000 as much as they should. Its just that the AS/400 is proportionately low even compared to the rest of their product line.

CROY: I think it was a relatively poor effort as an advertising campaign. Burke mentioned branding and thats a good aspect. But, to reach your customer base youve got to give them a place to follow up. In this campaign, they showed no 800 number, no Web site to visit or anything like that. They didnt splash that on the image. It was nowhere to be found. So, you presented me an intriguing ad, where do I go for more information? That seems to me like a glaring omission for an ad campaign.

SEARCH400.COM:Do you think the lack of contact information is deliberate or was it just stupid? Well, maybe not stupid, but perhaps, shortsighted?

CROY: I like your word.

SEARCH400: Stupid?

CROY: If the shoe fits.

SEARCH400.COM: I guess it goes without saying, then, you dont consider their sales efforts aggressive enough?

CROY: What sales efforts?

ALLEN: I would agree with Steve. What sales efforts?

CROY: They dont really sell. They have to depend on VARs. VARs do a better job than IBM.

ALLEN: And, even most of the VARs are just astute order takers. Theyre just working the existing customer base.

CROY: Exactly.

ALLEN: And, thats because its hard to get into a customer who isnt using the AS/400 because they dont know about it. Its a completely foreign thing to them. Every time you open up an Information Week, theres not a story about the 400. Its about an NT box or a mainframe. Theres always something about Bill Gates talking about doing this thing or that. You dont see too many things about Lou Gertsner doing some leading edge thing--good or bad.

CROY: Not too long ago, IBM announced a 5GHz chip. If that were Intel, that chip would be on the market next week. Whats IBM going to do with it? Thats the difference between companies like Intel and companies like IBM. Intel is in competition to see who can get into the market first. If they develop a product, theyre not going to sit on that product. In the last year, IBM led all companies in patents. So, this is a company that has tremendous R&D potential, and theyre losing shares in the marketplace to Intel and Sun. Why? They have the cash advantage. They have the technological advantage. They have the talent advantage. Why arent they innovators?

ALLEN: In the early 80s IBM was known as the sales and marketing company. Everyone looked to them to learn how to structure their sales efforts. They were not known as a technical company. Now, theyre known as a technical company. Now, no one wants to do marketing like them. Thats where they've gotten off course. Sure, their products are outstanding, but they dont tell anybody about it and make it hard to find out about it.

CROY: You want marketing? Windows 2000 was announced with about 60,000 bugs. Microsoft said, only some of them are fatal. People are lining up to get it. If thats not marketing, I don't know what is.

ALLEN: Thats what frustrating. We know the products are better.

CROY: When was the last time you had an AS/400 crash?

ALLEN: We know the products are better, it just without that constant reminder from IBM about that, its our word against Bill Gates. And, who are we to convince this new customer we know what were talking about?

SEARCH400.COM: We touched upon it earlier, but what about IBMs attempts to push the AS/400 as an e-business tool? What about Websphere? Is it going to save the AS/400 or hurt it?

ALLEN: The strength of the 400 has always been that history hasnt been forgotten. Theyve always kept the older technology even as other stuff comes out. They always improved it. But in recent years, they havent updated the old with the new. Id hate to see that happen. Novologics business is to focus on the new stuff. Were trying to ride that wave of the e-business platform. Well, they may say theyre pushing it, but get a magazine and show me the proof. I dont see any ads about Domino and the 400 being the place to run your e-business applications. I see a lot of ads for Windows. Im not bombarded with ads about Domino.

CROY: Perception in the marketplace is that the AS/400 is old technology. Even though the machine underlying the code is completely different than it was in 1988. With everyone serving up GUI images how can it compete? Youve got two sales people one showing graphics the other is showing green screen. It looks dated. If youre focusing on Java, you need a visual presentation. They want to make it a service machine. Theyre competing with 24x7. IBM wants to make it compete, but they are not committed to making it the open box that the Unix world acknowledges.

SEARCH400.COM: IBMs chairman and CEO Lou Gertsner had mentioned in an interview recently that he would not rule out spin-offs of the company. There was also some talk at COMMON about Dell Computer Corp. being interested in the AS/400. Would the AS/400 be better or worse off if it were spun off as a different company from IBM?

ALLEN: Thats a dangerous one to try to answer. Having made trips to Rochester where the 400 is made and talking with people that are back in the technology side of that group, I know they are all as exasperated as we are about the lack of marketing of their product and the restrictions on what they can and cannot do. They have one of the better R&D labs in the world. But, they constantly have to wait to bring it out, let another server line catch up or dont do it at all because it will impact the mainframe group. I think if it were allowed to work more autonomously whether inside or outside of IBM, it would be better off.

CROY: I dont think thats going to happen. I dont know what their problem is but they dont seem to be able to commit to let the AS/400 live up to its potential. Its IBM internal politics that prevent the AS/400 from dominating certain parts of the market.

ALLEN: What the guys at the top [of IBM]; need to understand is that customers are not loyal to IBM, but loyal to 400. Thinking that these customers are loyal to IBM is a mistake. They need to try to overcome that. I think if they let the AS/400 live up to its potential like Steve said, theyd get more customers who were loyal to IBM in the long run.

SEARCH400.COM: You dont think theyll ever give up the AS/400?

CORY: I dont see how they could afford to give it up. There was a time when there was an adage that nobody ever got fired for buying IBM. But that is no longer true. IBM better wake up to the fact that management is not interested in the technology. Management is interested in solutions. I want an e-commerce site out there. Im not interested in the technology. I want to generate revenue. Give me a solution. If I have a deadline to meet and I have a site to put up to the public, Im not interested in who the provider is, but whether it works or not. Give me a solution. The brand loyalty to Big Blue is over. I need solutions, not platitudes. Where is this mindset coming from within IBM? Why is it allowed to exist?

CROY: If we knew that, we wouldnt be here talking about why its marketing was bad.

ALLEN: Yeah, wed be over at Gertsners office sharing a cigar.

SEARCH400.COM: But, if everyone else thinks IBM is out of sync with the industry it serves, why cant IBM see it for itself? It almost sounds too simple. Just change. Why cant they?

ALLEN: Inertia.

CROY: Inertia is one of those properties that most people who havent studied physics dont really appreciate. Its like the car on the train track. Surely the train sees me. He can stop. Well, stopping a 60-ton train while its going 70 miles per hour is not an easy prospect. The dot-com companies, small agile companies, can take advantage of the marketplace much easier than a company the size of IBM who has a considerable history and inertia behind it. Getting it to change direction is not a simple or easy process.

SEARCH400.COM: Some administrators say the AS/400 is a hard sell because IBM doesnt promote it to the CEO or CIO. Is this your experience? Isnt it your job to sell it to the CIO or CEO, not IBM?

ALLEN: Microsoft isnt relying on its business partners to sell the world on the fact that their operating system is better than what IBM and Sun have to offer. Im just one individual trying to convince them that the 400 is the best technology.

CROY:Again, that AS/400 is old technology.

ALLEN: Thats right. What is an AS/400? I saw one of those things once, its an old mainframe, right?

CROY: Yeah, its down at the Smithsonian.

ALLEN: You pick up a newspaper ad and you see ads for Compaq and Windows 2000 and Gateway. Its what theyre reading in tradeswhat theyre seeing at the airport. Its real easy to walk in the door and say Ive got this Microsoft stuff and its really great. Well, theyve probably heard about it 30 times even before I walked in the door. And, when I walk in and I say, Ive got this thing called the AS/400. Theyve never heard of it, let alone seen one, despite the fact that theres more AS/400s than any other server on the planet. Its the best-kept secret.

CROY: Its a hard sell to go into the boss office and you show him a green screen presentation and tell him its going to be a $30,000 solution and the competitor on the block comes in with an NT box and does a nice GUI presentation and tells him its going to cost 13 grand. Arent we really talking about perceived value? IBM doesnt advertise it and the person isnt familiar with the product, whats the perceived value? Not much, right? Microsoft, as Burke has pointed out, is a known entity it has a perceived value. Whats the perceived value of the AS/400? And, to paraphrase Burke, trying to go in and sell his product to someone whos never heard of it and tell him the AS/400 is the greatest thing since sliced bread, the guy behind the desk says If its the greatest thing since sliced bread, how come I havent heard about it?

ALLEN: Sometimes, the only way to convince someone to use an AS/400 is to give it to him and let him use it for a while and let them see how good it is. They dont want to give it up. But, us small business owners dont want to do that that often.

SEARCH400.COM: What can IBM do to make you happy? Is there anything?

ALLEN: Market the box.

CROY: Tell everybody that major league baseball runs all its stats on a 400.

CROY: Tell them Microsoft used over 200 AS/400 to run its business for many, many years. I still think they have an enormous number. They tried for years to move off, but were never able to do it.

ALLEN: Most of the major casinos in Las Vegas run on AS/400.

CROY: Dont be afraid to use a number or an Internet address.

ALLEN: Dont just tell people at conventions. Right now, theyre preaching to the choir.

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