Remarks By Peter Bingaman, COMMON Spring 2005

[Transcription from the show]

[Note: Before Bingaman's remarks, IBM showed a video, which you can download at ftp://ftp.software.ibm.com/as400/web/iseriesmyseries/video/ and see for yourself. This one is called Covered.mpeg.]

Afternoon. We'll be seeing more of this story unfold throughout the next 20 minutes or so. Let me just take a couple of minutes to introduce you to who I am. I just joined the iSeries team about four months ago. I joined IBM about 8 years ago, so by many standards, I'm pretty new and I'm a rookie at IBM. Before coming to IBM, I spent a couple years in sales selling Chef Boyardee ravioli, Gulden's mustard, and Jiffy Pop popcorn. I was actually looking for some pictures last week, looking very proudly by my displays, wondering what the hell I was doing back then.

[Laughter]

I spent several years in advertising. I had clients with products from Johnson & Johnson, General Mills. I spent a couple of years with Hewlett Packard, on their account over in Europe, before coming to IBM. And in the passing years, I've made my way through the organization to be where I am today. I tell you that because it's sort of a setup to just telling you that this is probably--no without a doubt--this is the best job I've ever had in my 18 year career. It has been an unbelievable ride.

There are a couple of reasons for that. Not the least of which is really the offering itself, the iSeries. There is nothing else in the world like it. Literally, nothing in the world like the iSeries.

Kelly Schmotzer, who many of you probably know for years, spent a couple of years working with me in Software Group, telling me all about the iSeries, the iSeries, the iSeries. I was like, "Yeah, yeah, yeah, yeah, yeah." And now look at where I am, and so I'm calling her everyday, saying, "This is great. This is great, this iSeries thing." It's an outstanding offering, the recognition of that, the value of iSeries has been outstanding and it allows me to sell this thing and market this thing with my team with real conviction.

The other reason this has been so great in just the four months I've met folks like you, our clients, our partners. I have never met such a team of people with the energy, the enthusiasm, the passion, the true belief in this offering and what it has to offer your businesses. The energy you have is truly unmatched in any other business that I've ever worked with, and it makes it a real pleasure to be part of this business. It allows me actually to sort of help energize the team, to bring a whole new energy to the team. And I think we can see today, if you haven't stated seeing it over the last few months, we're really beginning to step it up in this business, and we're stepping it up in a very big way.

What we're looking at from a marketing standpoint on iSeries is really very simple. This is the chart I show everyone. This is our challenge. In marketing, there are a lot of metrics we look at, but this is what it comes down to for us in iSeries. It's awareness and consideration. Awareness is truly a measure of how much of a market we're actually playing in. So we're probably addressing anywhere between 15 to 20 percent of the market, depending on the country you're looking at, and the job you're looking at, and that's a bit of a problem. The great news is that when people do become aware of us, just about 60 percent of the time, we're in the process of taking them through what they're looking at in the iSeries, explaining the value of the iSeries. We are actually being considered. So the challenge here is simply one of awareness. It's simply one of bringing the voice of our customers out to the market bringing, your energy, your success stories, all the great experiences you've had, and sharing them with the rest of the world. That's what the job of marketing is all about, that's what our team is focused on, and that's what we're expressing in all of our work.

Over the past several years, I'm sure you may have heard similar stories from people who proceeded me, and the question is usually, "Well, where's the money?" The money is here. Total SG&A dollars will increase about 20 to 30 percent this year. The money we're putting into our channel incentives will increase about 40 percent year on year. And advertising alone will sometimes triple, again depending on which country you're looking at.

There should be no doubt, in this room or anywhere else, that we are coming back, we're bringing your voice to the market and we're going to make a statement about the iSeries in 2005.

[Applause] It's great to have a front row to get the applause going.

One of the biggest changes we're making in our marketing efforts is this. Increasingly, it's the C-level executives that are beginning to make the decisions more often than not, right? So it's incumbent upon us to make sure that we're telling them the story about what the iSeries has to offer. Mark was telling you, it's not a technology story anymore. It's never been a technology story with the iSeries. It's a business value story. It's about reducing cost and increased return on investment, taking the cost out of your business so you can re-invest it in growth. These are the stories that C-level executives want to hear, and this is why more and more we're going to telling you the business value stories that you bring to us.

It's the reason we launched print advertising in the Wall Street Journal just two weeks ago. This was a major impact unit. Four pages in the Wall Street Journal, bringing your voice, customer success stories, you can see it in the insert you have on your chair. The great thing about this campaign is it's not stopping here, it's going into Forbes, it's going into Fortune, it's going into CIO, it's going into BusinessWeek and CIO Decisions. We're making a big statement in the market. We're telling the story about the iSeries. We're investing in growth. It's a great, great campaign we're going to continue to roll out. You'll start to see single page units, one directed at the CEO, one directed at the CIO, and one directed at the CFO, all in the publications they're reading, and more and more we're going to put an industry flavor on it, so we can be more and more relevant to the marketplace. We're going to be seeing this campaign rolled out around the world.

Print is not the only way we're going to reach customers. We have a great new radio campaign that just rolled out in the U.S. It's a lot of fun.

[IBM played a radio spot, called Thrilling Adventures in IT. It was very funny, with deadpan humor, but it is not yet available on the Web.]

You like that?

[Applause]

Bob Cancilla actually sent me a note about just this last week, he heard it while he was driving in L.A. and he got in a couple of fender benders. It's a lot of fun, and we're having a lot of fun with this radio. It's bringing a little bit more flavor, a little bit more personality, to building an iSeries brand.

So that's radio. There's another major medium we use to drive awareness in the market. And this is really where a lot of the stories get told through third parties, where we get a lot of credibility behind the message, and this is through the press. The press is an incredibly important to us, we've been actively working it all year round. Since we came on in November, we've been going out strong, through March. Through today, we have about 250 press hits on the iSeries. That compares to a little under 500 in all of last year. So we're on a strong pace now to double the amount of press hits throughout the year. And importantly, the great majority of them are all around the customer successes we've had. So if you want to see your names in the press, feel free to send them on up, we'll get them on out, we'll tell them the stories because it's a really great way to bring the iSeries back into the mainstream.

The other area we need to attack very aggressively, and we will this month, we're helping you right now, is in blogging, and I was really glad to hear our previous speaker, John Patrick, talk about the importance of blogs, and PodCasts in particular. We're struggling with Malcom and Frank Soltis a little bit getting this thing up and running. So if you just do me a favor, and stand up and give them a big round of applause, and get some energy behind this thing, that would be really great.

[Applause]

Blogging! Blogging! Blogging! Blogging! Frank's red. He is beet red right now, and he's none too happy, because he's got his work cut out for him right now. At least I warned you I was going to do that.

So we're going to get some blogs going over the next couple of weeks. We have some podcasts that we're starting to think through to get that moving hard core as well.

Let me spend two minutes on what might be the biggest announcement the iSeries team has made in maybe a decade. And that's no joke. The iSeries Initiative for Innovation is absolutely enormous. It allows us to expand our reach from what was maybe 100 to 200 ISVs into the thousands. Today, we're offering up our program that leaves no ISV behind in their willingness, their ability, their desire to get their applications modernized on the iSeries. It's a major investment, north of a hundred million dollars alone just to make this work for us.

So we've got Application Innovation, which is ISV application modernization, on the Tools Innovation program, we've got over 60 tools providers signed up on the iSeries Developer Roadmap. This allows us to partner ISVs and clients with tools providers to provide capabilities that quite honestly IBM doesn't have. So we're suddenly starting to harness this great amount of intellectual capital in the market, technology experience with capability on the iSeries that we were not tapping into before. It's an enormous effort for us.

And so the third piece is the iSeries Innovation program. This is where we're sort of flipping this on its head a little bit. In the past, even today, what we've tended to do is bring a lot of our clients and our ISVs into Rochester to tell them about the iSeries roadmap and what it's going to look like technology wise. This is about bringing our tools providers, our ISVs, a lot of intellectual capital that exists outside of our industry, to figure out what is going on by industry--retail, banking, wholesale, insurance--collectively getting our arms around what the pain points are today and tomorrow, and figuring out together what we need to do to design the most powerful solutions for our customers. So we stop designing the hardware in isolation of our software, stop designing the hardware in isolation of the applications, so we start building solutions together, so that our partners and our customers are telling us what the iSeries roadmap should look like. This is what fuels innovations. This is what will fuel our future.

We've done a lot of work over the last few months. I want to give you a sense of what our partners are telling us. Harvey Najim is the CEO of Sirius. They are the largest solutions provider for iSeries in the world. Harvey is predicting double-digit growth for iSeries this year. Last week, the solutions team here in the front-row met with north of maybe 200 partners over the course of PartnerWorld. And I will tell you from my perspective, seven or maybe eight out of ten partners were on this point of being able to see double-digit growth in 2005.

We are going to make it happen this year. I said it before, I'll say it again: We're stepping up, we're stepping up big. That's what marketing is going to do in 2005, and it's going to benefit all of us. Thank you for your time. Now let me leave you with another boardroom scene.

[Note: After Bingaman's remarks, IBM showed another video, which you can download at ftp://ftp.software.ibm.com/as400/web/iseriesmyseries/video/ and see for yourself. This one is called Automatic.mpeg.]