The Four Hundred

Storage Solutions Group, the marketing company based on the Isle of Man that peddles the FAST400 interactive governor buster for AS/400 and iSeries machines, has not been fazed by the recent revamping of the iSeries line. Business is brisk, and SSG's managing director, Colin Wells, doesn't expect that to change. In fact, changes in customers' buying patterns, the advent of a reseller channel, and a likely price increase make SSG's financial prospects seem pretty good.

SSG has been selling the FAST400 tool for 12 months now, despite the much-debated ethical and legal issues of using it, and has been able to get around 200 customers a month to acquire a license to the governor buster. That's about 2,500 customers. While it is hard to estimate the potential lost hardware revenue in new or secondhand equipment sales for interactive features, it probably ranges from something like $2.5 million to $25 million. (One recent SSG customer bought licenses to cover eight processors for $8,000, and obviated the need to spend $742,000 on an interactive feature upgrade that was actually on order, according to Wells.) My lost iSeries and AS/400 revenue estimates could be low.

Though 2,500 FAST400 customers may not seem like a lot, the number could grow quickly in a down economy if companies do not want to move to the new iSeries line--regardless of the lower prices these machines have for a unit of processing power and regardless of the technical benefits--because they do not have the money to do any kind of substantial upgrade at all. If anything, a bad economy plays into SSG's hands, unless IBM sues SSG or its customers (if it can locate them) and gets an injunction prohibiting the use and distribution of the tool. That has not happened since FAST400 was launched by TigerTools, the original distributor of the program, in October 2001. Customers seemed to be emboldened by the fact that IBM has not been able to absolutely stop FAST400 from working and, as far as we know, neither SSG nor its customers have been contacted by IBM's lawyers with lawsuits or even threats of them in the past year.

Wells says that the major change he sees in sales of FAST400 is how and where customers are using it. During the first six months that SSG was peddling FAST400 on behalf of the secretive and anonymous OS/400 bit-twiddlers who dreamed up the governor buster, a lot of companies only wanted to get a 14- or 28-day trial license to the program, to play with it on a development machine with one or maybe two processors. Now, says Wells, companies are coming to SSG and acquiring licenses to cover one or two dozen processors across a bunch of machines that they actually use in production. Perhaps most significant, Wells says that as the initial customers with one-year licenses have come up on their renewals, and that, so far, he has a 100 percent renewal rate. Wells also says that a number of resellers are in the works for subregions in the Americas, Europe, and Asia. If resellers start pushing the product hard, even if they are small, the number of machines running FAST400 could grow at lot faster in the coming year than they did in the last.

One potentially mitigating factor on growth might be a likely price increase on the FAST400 tool. TigerTools charged tier-based pricing for FAST400 when it controlled the marketing of the product. This pricing was approximately 10 percent of the cost of an interactive feature upgrade for a particular AS/400 or iSeries machine. SSG has kept it simple, with a fixed price set at $1,000 per processor, but a reseller channel is going to want to charge more money than that, so it can get a bigger piece of dough for itself. SSG probably doesn't want to see its revenues decline if it shifts to a mix of direct and indirect sales, either, so the potential price increase that Wells has hinted at seems all the more inevitable. He won't say what it will be, of course. But, let's face it, the perceived value of FAST400 is a lot more than $1,000 per processor to customers facing big interactive feature bills or a move to a new iSeries with the Enterprise Edition.

Wells says that the techies behind FAST400 are testing the latest cumulative release of OS/400 that came out in early February, and will in short order have an updated release that circumvents whatever "Tiger balm" IBM has woven into the PTFs to disable FAST400. Wells also says that he has several of the revamped iSeries machines on order so he can test FAST400 on the Model 800, which has fixed 5250 capacity. The FAST400 programmers will also be looking into how they might be able to activate 5250 processing capacity on Model 810, 825, 870, and 890 iSeries machines that are designated as Standard Machines, which have zero interactive capacity. FAST400 will not turn Standard Edition machines into Enterprise Edition machines, which have software licenses and, in some cases, hardware features that distinguish them from Standard Edition machines. However, it is safe to say that 5250 OLTP capacity--as the 5250 green-screen protocol that is at the heart of most RPG and COBOL applications on OS/400 servers is now called by IBM--is the main reason why any iSeries or AS/400 shop will upgrade to a new iSeries and the Enterprise Edition. So if SSG can crack this wide open, all hell will break loose again inside IBM, among its reseller channel, and among the OS/400 customers who may or may not think FAST400 is something that is ethical or legal to use.