IBM Bets the Bank on iSeries Solutions

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Now that IBM has rolled out the eServer i5 family, it is refocusing its attention on products that do a better job of selling servers than the latest and fastest hardware. Those products are the software solutions, and IBM intends to dedicate more of its resources to solutions and the companies that develop them over the next year. If Big Blue uses those resources wisely, it could bring many new independent software vendors (ISVs), applications, and customers into the iSeries community.

While few people noticed it, IBM began powering up its solutions focus last summer well before it completed the eServer i5 announcements. At that time, the iSeries group launched programs to reengage with ISVs that provide banking and wholesale distribution solutions. Both initiatives make sense, as the iSeries has many customers in both industries. While over 16,000 regional and community banks use the iSeries, IBM wants to expand that number by reaching out not only to its current ISVs, but also to new ones that support other servers. One recent win on that front is Information Technology, Inc. (ITI), a major player in the community banking software business. Most of ITI's customers are on Unisys servers, but ITI ported its software to the iSeries this year to capture additional market share.

On the wholesale distribution front, the iSeries team is looking to gain market share by deepening its existing ties with wholesale ISVs. Besides helping ISVs to close sales with iSeries customers, IBM is pursuing non-iSeries prospects that distribute durable goods such as automotive parts and electronic components. At such sites, IBM has developed plans to displace competitive servers in situations where wholesalers are under pressure to make difficult or expensive upgrades. In particular, look for Big Blue to pursue wholesalers who are running applications on Hewlett-Packard's HP 3000 or HP 9000 servers.

In addition, the iSeries group is reengaging with its most important ISVs through its i300 initiative. Under this initiative, IBM is encouraging its top 300 iSeries ISVs to take several actions. These include supporting WebSphere middleware in their applications, supporting the i5/OS operating system that runs on the eServer i5 models, and getting their applications certified as iSeries ServerProven products. The last program holds particular value for iSeries customers, as they receive rebates from IBM when they purchase ServerProven products with selected iSeries and eServer i5 models.

On the whole, IBM is making good progress on its i300 objectives. At present, over 500 iSeries ISVs support i5/OS, including most of the top 300 ISVs. The number of iSeries ServerProven applications has grown from a handful a year ago to over 340 products today. Much of that growth has taken place in the last several months.

Playing the PartnerWorld Card

As iSeries General Manager Mike Borman is reaching out to ISVs, he is asking for help from a longtime friend of the server: former iSeries General Manager Buell Duncan. While Duncan now manages IBM's ISV and Developer Relations programs, he remains an iSeries advocate at heart. He has good reason to do so, as iSeries ISVs compose up to half of the software vendors that participate in some of his most important initiatives.

Given the importance of the iSeries ISVs to his group's success, Duncan is working hard to reach them. This includes giving them attractive incentives to join PartnerWorld Industry Networks, a program that helps small and mid-market ISVs build support for IBM products into their applications. Among the membership incentives that Duncan's team has recently cooked up are discounted advertising in over 30 industry publications, discounts on lead generation services, and programs that team up ISVs with IBM product resellers for joint sales efforts.

Armed with these and other incentives, IBM has made considerable progress among small and mid-market ISVs. Besides convincing almost 2,000 ISVs to join PartnerWorld Industry Networks in less than a year, Duncan's team has dramatically increased the percentage of ISVs that are considering or preferring IBM as a partner instead of Microsoft. To make further inroads into the ISV community, the team will launch three new Industry Networks during the first quarter of next year. Among these, two of the Networks--one for manufacturing and another for wholesale distribution--could especially help the iSeries community. Since the iSeries has a significant share of the companies in both industries, it remains an attractive platform for manufacturing and wholesale ISVs. As a consequence, the two new Industry Networks could capture several new software vendors for the midrange server.

To back up Duncan's efforts on the ISV front, the iSeries team is working on a new marketing campaign for the iSeries that will focus on improving the server's image among customers and prospects. The campaign, which includes some television and radio spots as well as print ads, has already been piloted in several cities. When it goes live in 2005, it could lend significant air cover to the ISV recruitment efforts.

IBM's plans for reenergizing the iSeries' solution ecosystem are ambitious and promising. They are what the server's customers and solution providers desperately need. I only hope that the company funds these initiatives as aggressively as it is planning them and then continues to do so beyond the coming year. If it does, then 2005 could be remembered as the year that the iSeries reversed its long, gradual decline and started to regain the prominence that it deserves.

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it..

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