You're offering a way to help them transition, to modernize. How?
With a combination of educational tools and specific offerings for the iSeries, such as WebSphere Studio Client. There are also individual deliverables, a red book, messaging on our Web site -- those kinds of things. For customers who are using RPG 3, the first thing they ought to do is step up to RPG 4 with WebSphere Development Studio Client. And, if they do that, what they get is an environment that gives them all kinds of tools, such as Web-facing tools, tools that allow them to encapsulate RPG code [and] business logic and present it in a Web format. All of these tools help them present in a more modern-facing environment to their end users. Again, it's simultaneously protecting the investment while giving customers access to the absolute latest and greatest in technology. You made it very clear that the iSeries would not likely be advertised on television because that's not where you get the best return on your investment. How are you marketing the iSeries then?
We're focusing on our ISVs and business partners, and that appears to me to be moving the needle in terms of our revenue growth. But it's more than just these specific investments. You introduced to iSeries users a developer's road map. What's the message you're trying to communicate?
That we're making a long-term commitment to our customers and ISV [independent software vendor] partners that the iSeries can handle what it has handled before with RPG workloads and will continue to do that forever -- as well as being able to handle the most sophisticated Java workloads. We recognize that there are 3 million Java programmers in the world and growing and about 300,000 RPG programmers and probably not growing. We want to make sure that people understand that there will be a solid development platform surrounding the iSeries for years to come. Such as? Are you doing something to reach the non-iSeries users, the CIOs, CEOs and CFOs whom users say are forcing them to defend the platform?
Let's talk about the IDC report [a recent report that touts the ROI advantages of consolidating servers onto the iSeries platform]. Most people who aren't marketing professionals wouldn't think of that as a marketing investment, but it really is. We're promoting that to a wide set of people. Quite honestly, this is intended for people who are more financially minded within the organization. The iSeries community understands technically that this [is] possible, but the financially minded people don't realize that this [consolidation] is a real source of cost reduction -- not cost avoidance, real cost reduction, fewer dollars going out of the company with our solution than there were before.
So that's an example of the kind of marketing that we're doing. But I do accept the challenge to make sure that our loyalists understand this better, and we'll work on communicating to them as well as to the broader community.You really haven't said much about Microsoft, but your customers talk about the company all the time. So you won't advertise the iSeries on television. What kind of fodder then are you giving your customers for fighting off this pressure to move to a Windows environment?
To me it's very, very simple. The majority of our customers who are buying our systems are looking for a solution. IBM is not in the solutions business. We rely on our ISV partners to provide the solutions. So, in order for us to be relevant to the decisions that customers are making; we have to connect in with our ISVs -- so that's where we are putting most of our marketing dollars. We know that will grow our business. We have evidence that says if we put money into [doing] things like co-marketing with our ISVs, that will get more leads for our business partners and salespeople.
It is debated with great emotion, but no substance, as to the effect television advertising has on improving server sales. It's very interesting to me that so many people have opinions on this. I'm a fact-based guy and I like to deal in facts, and we know that investments for the iSeries in business partners relates to customers. And frankly, I stay more focused on the customer in terms of what resonates with them than trying to watch the competition. I watch the competition. But trying to emulate the competition -- just be a 'me too' -- is not really the right approach.Do you have a chance of doing that -- convincing the broader community?
There's no question that we do. My view, as I said, is: Are you able to grow your business and your revenue and [keep] your high satisfaction? We're doing those things. But they're inundated with pressure to move to Microsoft. It's everywhere in this environment.
We have to be clear. IBM has a very strong Microsoft-oriented server business with our xSeries. So if that's what they want, we'll sell them one of those. If they want one with the iSeries we'll sell them that. We're not in this sort of intergalactic battle. We're focused on customers. What makes a customer successful? How do they think? How do they prioritize the things that are important to them? The iSeries represents a value proposition that really does resonate with a set of customers. Is that as many customers as are buying Windows? Nah. Will it be? No. But it doesn't have to be in order for us to be successful. I suppose it would be like selling a Lexus to a community that likes Fords?
People have different buying behaviors, and we study this at great length. What we find is that the iSeries buyer is much more focused on their solutions than they are on technology. They're much more focused on things like time to value. Everybody focuses on time to value, but, to them, they don't ask questions like 'which database does it run?' or 'which Web applications server can I get with it?' They tend to ask questions that are more focused on the solutions. The iSeries community wants that general common consumer recognition that Windows has, and it's not going to happen, is it?
It's not going to happen. And there's no amount of money that would be wisely spent that would cause that to happen. It's better for us to focus on what we can offer as a value proposition to the people who it will matter to. I know the barometer for many within the community is that we want it to be like Windows. Well, Windows is a unique thing in the industry.
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