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Vendors Adapt to a Changing IT Market

Analysis of News Events
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With companies getting cautious about their IT spending, vendors are launching new initiatives to keep the orders flowing.


Over the last several weeks, most of the news items that have landed on my desk have been too small for a full-blown article but too interesting to ignore. So in the spirit of going with the news flow, here is a rapid-fire review of the best stuff from my story pile. As you will see from the stories, change is definitely afoot in the marketplace.

Big Blue Swizzles Support

Two weeks ago, IBM announced a new offering that gives customers a single phone number to call for technical support on all IBM servers and storage, including the System i. The offering, IBM Integrated Support, will provide comprehensive technical services for both servers and operating systems, including AIX, i5/OS, OS/400, z/OS, Linux, and Microsoft Windows. An integrated support team will field all questions and act as the central point of contact during problem escalation.


At this moment, it is not clear how IBM will price or position this new offering versus its existing support services. I plan on learning more about the support plan over the coming weeks, so look for further details in upcoming columns.


Meanwhile, IBM is taking steps to keep companies buying its products in the midst of the economic slowdown. In mid-February, IBM's Global Finance division announced that it will pass along some of the benefits it receives under the new U.S. economic stimulus package to its customers. As a result, customers can get lower lease rates from IBM or receive free three-month deferrals on leases of equipment installed this year.


In addition, Big Blue has launched a new promotional offering for System i customers. Under the promotion, you can get a credit when you trade in an iSeries Model 810 or 825 for a System i Model 525 or Model 550 Capacity BackUp Edition. The credits range from $7,500 to $25,000, depending on what you spend on the CBU Edition. In many cases, this will be more than you will get for these systems from a used equipment dealer.

IT Budgets Take a Body Blow

Speaking of an economic slowdown, more data is coming in that indicates companies are tightening their belts on IT spending. In late February, ChangeWave Research announced that in its latest survey of corporate IT spending, 23 percent of the respondents said their IT spending will decrease. That is three points higher than what companies reported in the same survey three months ago. Moreover, only 15 percent of companies said that they will increase their IT spending, a 9-point drop from the 24 percent that planned to increase spending three months ago.


In addition, Forrester Research has slashed its 2008 domestic IT spending growth projections for a second time. The analyst firm knocked its estimated increase for U.S. IT spending down to 2.8 percent from a lowered estimate of 4.6 percent. (And I thought that I was being conservative!)

SAP Courts SMB

Last week, SAP announced a new "fast-start program" that could reduce the time and expense involved in deploying the company's Business All-in-One applications. The program, which is targeted at small and medium-sized businesses (SMBs), is an effort to make SAP's applications more approachable for smaller firms.


At the heart of the fast-start program is a new online configurator tool. The tool lets companies customize Business All-in-One to their industry needs, get cost estimates for the configurations, and generate functional specifications for the applications. The software giant is also touting another tool that automates parts of the application installation process.


To some degree, SAP's program could be a response to Oracle's Accelerate initiative for SMB firms. For almost a year, Accelerate has been pairing specially priced Oracle applications with tools that speed up configuration and deployment processes. By launching a similar initiative, SAP may be quietly admitting that Oracle got a leg up on it in the "ease of deployment" area. Unfortunately, SAP's new program is currently available only in Austria, Australia, Belgium, the Netherlands, and Switzerland. However, it will be rolled out in additional countries during 2008.

Microsoft Makes Nice

In a move that took the IT industry by surprise, Microsoft has announced that it is dramatically expanding the ability of its products to interoperate and share data with other software. The company is posting around 30,000 pages of documentation on the MSDN Web site that describes the APIs and protocols used to access its high-volume products. These products include Windows Vista, Windows Server 2008, SQL Server 2008, Office 2007, and Exchange Server 2007. Developers can use these APIs without license or royalty fees as long as the applications that use them are for non-commercial use.


While Microsoft's announcement was primarily aimed at the open-source community, it could benefit System i developers as well. For instance, a System i shop might use the newly published APIs to invoke Exchange Server from a PHP application  (or perhaps even an RPG routine) running on i5/OS. Considering the potential of this announcement, I would encourage those of you with Microsoft skills to play with the new protocols and then submit articles about your discoveries to MC Press Online.


There you have it...a condensed version of the hottest stories on my desk. If I've missed something important, click on the "Discuss" button below and enlighten all of us about whatever news is burning up the airwaves in your corner of the System i community.

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology.


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