IBM Defends iSeries Marketing

by Timothy Prickett Morgan

If there are two recurring themes among OS/400 platform enthusiasts, they are that the AS/400 and now the iSeries is the most reliable platform that IBM or any other IT vendor has ever built, and that Big Blue does not do enough to push the box against alternatives, which get a lot more airplay and advertising in the press. The opinions run strong on this issue, both inside and outside of IBM, and it was once again the central issue at COMMON.

There is a wide chasm separating the marketing people at IBM, who want to peddle the iSeries quietly through the resellers and independent software vendors, and the hard-core OS/400 enthusiasts, who want IBM to take a stand, and say the iSeries is the best platform, and spend lots of money to buy display and other types of advertising to tell the world this message. Both sides think they are right. No, they know they are right. The problem is, what we are talking about is IBM’s platform—the iSeries—and its advertising and marketing budget dollars.

The iSeries Nation Town Hall meeting at the fall COMMON show in Orlando, which functions as the old Sound Off meeting used to, is the one place where people can directly compliment or complain to IBM about what it’s doing with the iSeries. Randall Munson, one of the most popular and well-regarded speakers at COMMON, who does consulting and speaking for the OS/400 business partner community, started an exchange with IBM top brass that pretty much sums up the two sides of this issue. Munson, by the way, spent two decades at IBM as a program manager in the Rochester organization, so he is not an outsider looking in. He was addressing, among other IBMers who were on the stage at the town hall meeting, Al Zollar, general manager of the iSeries line, Cecelia Marrese, vice president of iSeries marketing, and Paulo Carvao, head of iSeries sales for the Americas region.

“More than half of my clients are business partners, and I want to talk to you on their behalf,” Munson said as he took the floor at the town hall meeting. “I want to talk a little about advertising. There was that one ad, if I remember. Pure Guava. Ran in Rochester once.” Everybody laughed. “The people here,” he said gesturing to the audience, “say that the world does not know the AS/400, the iSeries. And the people on the stage, although the faces have changed, always say the same thing. They always say, ‘We hear you. Wait ’til next year.’ We hear 2004, just wait till 2004. I heard that in 1994. It’s almost word for word, and it’s not changing. The business partners and your ISVs are getting killed because of the impression in the marketplace.” There was tremendous clapping from the audience.

Zollar responded: “I’ve never met two people who can agree on the same thing when it comes to marketing,” and the crowd, while not enthusiastic, appreciated this truth. “I think this a little different. We are not going to invest in TV until we prove that it can drive sales. We are running a test with the xSeries right now, and that’s going to give us some data that quite frankly will be used across the Systems Group. And there’s another decision point that, should we take the dollars that we’re using to try to promote more ISVs and business partners and redirect them into advertising? I'm not saying wait ’til next year. This is where we are today.

“With respect to business partners,” Zollar continued, “we actually study things like gross profit margins, the success of both distributors as well as partners. And we know some partners have struggled to invest in new iSeries technologies. They struggle with skills. Our partners, our ISVs, are really our critical go-to-market resource. The whole message on advertising is, we’d rather spend our dollars there than spend them on advertising that might make some people feel good for a moment but be forgotten two weeks later, versus something that’s more sustainable.”

Munson did not leave it at that, because advertising is not the only issue. “I agree, and I understand,” he said to Zollar. “We don’t really care about that. What we care about is that the general impression of the people that we work with is that they do not think that the iSeries is a viable platform. I don’t want to discuss TV commercials. It is that general impression that is the problem. It is those very business partners who are working uphill because of that.”

Marrese remarked that her own children, who obviously know that she is the head of marketing for the iSeries, gave her funny looks when they saw an IBM ad that did not tout the iSeries. From the mouths of babes (or teenagers, if that is the case).

But both Marrese and Carvao went on to explain what IBM is doing in terms of marketing the iSeries. Marrese said IBM is spending more marketing money in 2003 on the iSeries than it did in 2000, 2001, and 2002 combined. Carvao said IBM is putting in 25 times the comarketing money into the ISV channel in 2003 compared with 2002. This is a very big change, of course, and it is a good thing, clearly. But if the spending in 2002 was only a few million bucks, then a few tens of millions of dollars spread across hundreds or thousands of partners may not yield a lot of momentum at first. IBM, said Carvao, has just retained 90 percent of the iSeries direct sales force to push the revamped iSeries product line. After rattling off all of these statistics, Marrese hit the nail on the head when she said the iSeries is a push market. It undeniably is. And the iSeries stands in stark contrast to the Wintel, Lintel, and high-end Unix markets in 2003, which are all pull markets. Vendors can’t fulfill their orders for these machines.

That is the crux of the problem. And it has been this way since 1994. That’s when Unix was an established midrange alternative and when Windows NT 3.51 entered the market with a bang.

Even before IBM had done the “Mach 1” eServer rebranding exercise, in October 2000, it had been working for three years on a technology roadmap and marketing message that could bring some kind of unity to its four major server lines. IBM’s eServer message is that it does not want to put one platform ahead of the others. It doesn’t want to point out the strengths in one eServer platform, because that points out the weaknesses in the others. So what we get instead is some nebulous eServer rah-rah-rah message that is supposed to convince CIOs, CFOs, and CEOs that IBM has the answers when it comes to servers; don’t worry about the details. And when CIOs, CFOs, or CEOs ask IBM what platform they should buy, IBM essentially asks them, “What are you willing to pay for?”

To those of us who know and understand servers, this attitude of IBM’s is the height of frustration. To those of us who make a living in the iSeries market, this attitude seems paradoxical, even suicidal.

However, there is humor in the gallows. Al Barsa, who runs an eponymous consulting company that pushes quite a few big iSeries machines a year, who has some interesting tools for big shops, and who usually gets to speak first at the town hall meetings, printed up some buttons that said “i comes before p, x, and z—egads!” (The “e” in egads was the “circle e” that IBM invented for e-business.) Tom Bittman, the Gartner analyst who gave the keynote address before Zollar and the iSeries team took the stage at the town hall meeting, and gave an eServer sales rule and the explanation of the different series designations in the eServer family. Bittman’s rule is i before x and p, but always after z. And here is what the letters stand for: z stands for zero discount, zero competition; p for possibly AIX, possibly Linux; x for extremely risky; and i for in spite of IBM.

This is all very funny, and humor can grease the gears that lead to understanding as we grind away, thinking about things. But the eServer sales rules are a little more complex. This isn’t funny, and it surely doesn’t scan or rhyme well, but I think it characterizes IBM’s attitude:

If you want it, we got it.
And whatever you got, please buy a lot.
If you can’t afford it, then we can support it
On a cheaper box.
But, dear customer, please remember,
When reviewing budgets in September,
That you only get what you pay for
Among eServer building blocks.
You’d better choose carefully.
Since your job, not ours,
Depends upon it.
And if you are too poor,
We are almost certainly sure
You’ll try on demand capacity.
And as for criticizing
Our plans for advertising
Just remember two more things.
They’re our platforms, not yours.
It’s our money, which used to be yours.

That needs some work, I agree. I never claimed to be a poet. I think maybe a series of bold limericks would be more fun. And the competitive position of the iSeries versus other platforms needs some work, too. But that discussion is for another day.

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