Duncan Lays Out 2002 Strategy in iNation Conference Call

by Alex Woodie

Buell Duncan discussed IBM's iSeries strategy for the new year in the first iSeries Nation Chatting with Citizens event of 2002 yesterday. Speaking from New Orleans, Duncan, the general manager of IBM's midmarket server division, said the iSeries had a terrific third quarter in 2001, particularly in Europe and Canada, but especially in China, where the iSeries has had three straight years of double-digit growth. Much of that growth is due to the release of OS/400 V5R1, which has been licensed by 25,000 companies to date, and the new LPAR and Linux functionality, Duncan said.

In addition to working with key ERP, CRM, SCM software vendors, Duncan sees new possibilities in the ASP arena. "There are 110 ASPs whose primary platform is iSeries," Duncan said. That business generated about $30 million in all of 2000. Through the first nine months of 2001, it generated $60 million revenue."

IBM also plans to emphasize competitive takeovers and server consolidation on the iSeries, particularly for Intel-based Windows servers, including Microsoft Exchange. IBM started its "Exchange Your Exchange" program last year to provide users incentives to consolidate their Windows-based e-mail servers on iSeries-based Lotus Domino mail servers.

Duncan also said that the iSeries would start running new workloads and spoke briefly about adding new operating environments to the system.

"There will be more operating environments that we'll bring to this platform, that will run in a native mode, that are going to make the value proposition stronger than we have ever seen before, and some of those aren't too far off," he said.

Specifically, Duncan said Rochester is looking at opportunities that may exist in selling users of Hewlett-Packard's now-defunct HP3000 on the merits of iSeries. Last year, Hewlett-Packard announced it would stop supporting the HP3000 line, a proprietary line of midrange servers that once competed with the AS/400 and Unix systems but had lost considerable market share since the 1990s.

"We have an opportunity right now to go after Hewlett-Packard and the HP3000 customer set, who are very disgruntled, who are very interested in finding a path to move and to migrate those systems away from HP, who has said it will no longer support them," Duncan said.

Duncan and IBM's vice president of marketing, Kim Stevenson, also talked about marketing. The focus of IBM's marketing will continue to be on the eServer brand, they said, with specific industries getting more targeted ads.

Duncan said the iSeries got a big boost from the recent IDC report on total cost of ownership, and said more reports like that will be forthcoming. "I think we have got some exciting things coming out in the next few months from the analyst community, to tell this story even more aggressively than we have done thus far," he said. "At the end of the day, it's about education."

Replays of Duncan's January 14 chat with the iNation will be available for the next two weeks at 1-888- 203-1112 or 719-457-0820 by referencing passcode 662635.