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IBM Executives Do the Shuffle As Sales Chief Departs

IBM sales chief Mike Lawrie's jump to the CEO position at Siebel Systems has caused his former employer to reshuffle many of its top executives into new roles. CRM software supplier Siebel is in the midst of trying to figure out how to transform itself into a CRM services provider, and it has tapped Lawrie, a 26-year IBM executive who most recently was in charge of Big Blue's massive sales and distribution organization, to take over the day-to-day operations of the company from founder Tom Siebel, who remains the company's chairman.

IBM likes to move executives around, but it seems likely that this game of executive musical chairs was not exactly planned.

When Lawrie departed IBM for Siebel this week, he left the top sales spot open, and IBM has filled it by moving Doug Elix, who has been senior vice president of IBM's massive Global Services unit, into that position. Elix has been a top executive in Global Services and its predecessor, Integrated Systems Solutions, since late 1996. He has been with IBM since 1969 and ran IBM's Australian operations before getting into services.

John Joyce, IBM's chief financial officer since November 1999, has taken over as head of Global Services. While it is unusual for the top bean counter at any company to make such a lateral move to head up a major division, Joyce has a depth of understanding of IBM's business that other executives cannot have, and he has been president of IBM's Asia/Pacific region. If anything, Joyce's move to head Global Services positions him for a traditional job that is currently vacant at IBM, that of president and chief operating officer. Eventually, IBM's chairman and CEO, Sam Palmisano, could resurrect that position, and cross-training his top managers is a good way to ensure that multiple candidates would be ready to fill that job.

Taking over the role of chief financial officer at Big Blue is Mark Loughridge, who has been in charge of IBM's Global Financing unit since April 2002. Before that, Loughridge was IBM's controller (a vice-president-level job), which made him responsible for the real bean counting at Big Blue. The Global Financing unit will report to Joyce, now head of Global Services, as it has in the past. It is unclear whether IBM will name a separate executive to head Global Financing.

Check Out the eServer i5 TV Ads

When IBM has been spending big bucks on its e-business advertising campaigns over the past four years. One thing it did was to create a lot of funny and memorable prime-time TV ads. The ads were also simple, because they embedded the idea of "IBM" in the minds of consumers and business managers who happen to be watching. The ads were not specific about any IBM product, which was intentional. IBM wanted to push the IBM brand, not any specific IT solution.

Some of these promotions, which are very expensive, featured IBM mainframes or Unix servers or X86 servers. That there were not advertisements featuring the AS/400 and the iSeries has been a thorn in the paw of the OS/400 platform's ardent supporters, as we all know. Finally, after many years of complaining on behalf of iSeries partners and customers, IBM is starting to test TV ads with an iSeries angle. The first ads will run in Kansas City and St. Louis, and if they raise the awareness of the iSeries and the new i5 in those markets, IBM will consider running TV spots in other markets.

New Book Questions Future of OS/400 Platform

A new book by Brian Kelly, a well-known speaker and consultant in the OS/400 market, comes out this week that questions the strategies and tactics that IBM has used over the past decade as it wrestles with what to do with the AS/400. The book, Can the AS/400 Survive IBM?, pulls no punches. Reading this book will probably bring back a lot of memories (some painful) and shake you up a little. Which is exactly what Kelly wants to do, of course.

Our very own Timothy Prickett Morgan is quoted on the book jacket, and pretty much sums up why we think this book is important:

Who owns the AS/400? IBM does, of course. But who pays for it? The several hundred thousand loyal OS/400 shops around the world do. At times, these two factions have had widely divergent ideas about how to improve and promote the AS/400. The computer business is as much about ideas and change as it is about any underlying hardware and software technologies. Change is difficult, and it often takes the concerted voice of many parties to compel change. Brian Kelly is very strongly and very loudly adding his voice to the symphony--some might say cacophony--of criticism IBM faces as its engineers, its marketers, and its customers try to predict and enforce their vision of the future OS/400 platform. The important thing is to communicate alternatives and possibilities and to keep doing so as conditions change. This is the only way to keep the OS/400 platform alive.

At the moment, we are one of the few organizations distributing Kelly's book. You can buy a copy on our IT Jungle online store.

MAPICS Buys PLM Vendor Magik, Posts Decent Second Quarter

OS/400 and Windows ERP software maker MAPICS announced last week that it has acquired the Magik line of product lifecycle management programs from Ceimis Enterprises, based in Laguna Hills, California. Simply put, PLM programs automate some of the processes involved in doing the initial marketing, design, parts supply and other accounting functions that manufacturers have to do when they create products. PLM programs wrap around and integrate with ERP systems. Ceimis is, in fact, a MAPICS partner, and the two have worked together to sell the Magik PLM software in OS/400 shops. The financial terms of the acquisition of the Magik product line were not disclosed, but MAPICS did not buy the company; rather, it acquired the Magik product and will be hiring key development and service people who can help it to support the PLM software.

MAPICS also said that it is now making money, like a number of ERP vendors have reported in recent weeks (if you heard a noise, it was a collective sigh of relief among all the ERP players). Specifically, MAPICS said that sales in its fiscal second quarter, which ended March 31, were $43.9 million, up 15.5 percent. Dick Cook, the company's president and CEO, said that new software license sales in its eponymous OS/400 software suite were up 50 percent since this time last year. The company's Windows-based SyteLine suite also showed strong results. Total software license sales in the quarter were up 13 percent, to $11.7 million, and services sales increased by 16 percent, to $32.3 million. The amount of deals that MAPICS had in the pipeline at the end of the quarter was $11.3 million, up 34 percent from the second fiscal quarter of 2003. The company brought $2.4 million (9 cents a share) to the bottom line in the quarter, compared with a loss of $1.3 million last year. Because things are looking good, MAPICS is now estimating that it will have total sales of $170 million to $180 million for the full fiscal 2004, and will bring between 43 and 48 cents a share to the bottom line. That means sales and profits are accelerating.

IBM Ships Red Hat with iSeries Power Servers, Cuts Price

As it promised it would do several weeks ago, IBM last week began shipping licenses to Red Hat's Enterprise Linux AS operating system to customers who want to have it shipped concurrently with their Power-based iSeries or pSeries servers. IBM is shipping Red Hat Enterprise Linux V3 with a one-year support contract at a standard (9 to 5) or premium (24/7) support level. IBM will ship the Red Hat license with pSeries 630, 650, 655, 670, and 690 servers, all of which use 64-bit Power4 or Power4+ processors. The Linux license can also be shipped with any S-Star or Power4 iSeries machine (Models 270, 800, 810, 820, 825, 830, 840, 870, and 890) and presumably will also be available for the new Power5-based Model 520 and 570 servers when they start shipping on June 11.

IBM also announced that the Red Hat licenses it sells for iSeries machines will be sold at a discounted level on the iSeries box. The standard license will cost $1,295, down 35 percent from the current IBM price of $1,992. The price of Red Hat Linux with a premium support contract was cut to $1,995, down 33 percent from the $2,998 price tag before the announcement. This looks like IBM is simply charging customers for Linux at its cost after a reseller discount it undoubtedly negotiated with Red Hat.

Vendors Create Enterprise Grid Alliance

This mission of the Enterprise Grid Alliance, which was launched last week, is to smooth over the substantial differences of opinion and differences in objectives among the hardware and software companies involved in the emerging grid computing market so that multiple grid standards do not create isolated islands of automation. The EGA started out as a suggestion by database maker Oracle as it was rolling out its grid-enabled Oracle10g database late last year. In addition to Oracle, the EGA board of directors includes representatives from EMC, Fujitsu Siemens, Hewlett-Packard, Intel, NEC, Network Associates, and Sun Microsystems. Missing on the list of EGA founding members is IBM and commercial grid computing specialist Platform Computing. These things take time.

OS/400 PTF Guide Moves to Four Hundred Guru Newsletter

For many years now, our partner DLB Associates has been creating the OS/400 PTF Guide to help you suss out the patches to OS/400. The OS/400 PTF Guide has appeared in this last section of this newsletter, and we hope it has been useful to you. The guide will now appear in Shannon O'Donnell's "OS/400 Alert" column in Four Hundred Guru on Wednesdays.