OS/400 Community Reacts to New eServer i5

by Alex Woodie

Just like the seasons, hope springs eternal in the iSeries reseller market. Business slows to a trickle when customers sense a pending server announcement, but when that day finally arrives, there's a sudden flurry of activity and optimism. IBM's eServer i5 announcement on May 4 was no different, and today distributors, resellers, software vendors, and other business partners are gearing up to provide users what they regard as the most powerful and flexible OS/400 servers Rochester has ever created.

The last time we witnessed an iSeries phenomenon of this magnitude was January 2003, when IBM got rid of the "interactive software tax" (well, sort of) and launched the new iSeries Model 800, 810, 825, 870, and 890 servers (see "A New Year, a New Attitude, a New Deal iSeries"). It took just a little while for everybody to sort through the changes, which were pretty significant, and as a result, all the business got rolling two months later, in March.

The same thing is going to happen this year, says Richard Allan, iSeries marketing director for Agilysys, a master iSeries distributor in Cleveland, Ohio. "There's this huge flux of quoting and requoting, a big swirling dust cloud of activity," Allan says. "Once that settles down, you're going to see an impressive roadmap for what the channel will do this quarter."

There's a lot to like with the i5 and the entire i5 announcement: there's the 40 percent improvement in price/performance; TV ads from IBM; the standardized rack-mountable chassis; i5/OS V5R3; the new NUMA-like architecture that will see four-way modules like the i5 Model 570 eventually scale out to 16-way machines; and even bigger 32-way and 64-way SMP machines. One of the early stand-outs, however, is the new i5 Model 520 Express Edition, which starts at $11,500 and is poised to take on low-cost Wintel and Lintel boxes. Distributors like Agilysys, Support Net, and Avnet Hall-Mark are required to buy the Model 520 Express servers in bundles of 20 from IBM, but that little change in channel customs may not matter: customers are reportedly interested in purchasing them by the dozen, and when the shipments start next week, there may be a single order for several hundred Model 520 Express machines, according to one source.

The i5 Model 520 Express holds promise as a workhorse departmental server for Linux, Domino, firewall, and e-mail and file serving workloads, says Mitch Kleinman, executive vice president at Computer Configuration Services, a Southern California-based iSeries reseller. "For 30 to 50 users, it's a great little box for Domino that can scale, and it has all the benefits of the '400, and the same thing for Linux," he says. "I don't think it's a 'Dell Killer,' by any stretch of the imagination. But it's robust, and it's an easy story to sell."

The Model 520 Express will be a hot box for new customers, and for getting new workloads at existing customers, says Michael Madigan, a vice president of sales for Sirius, the dominant iSeries reseller based in San Antonio. "Whatever we sell, if it ain't Intel, it kind of gets challenged. [C-level executives say] 'What is this? Why am I putting in this box that is not standards-based?' " Madigan says. "The 570 standard package is another one. It's a pretty rich configuration. I think it will provide real competition for Linux-based servers. There are things it can do that Intel servers can't, with its logical partitioning capability."

The new eServer i5 boxes will require a newer, broader level of skills for resellers, which have been encouraged by IBM over the last three years to acquire new skills and solutions to sell. IBM's new focus on solution selling has changed the skills that resellers need to survive, and its new "tidy up" advertising campaign, which is a push to consolidate Windows and Linux servers onto iSeries boxes, will require resellers to add even more consultant-like skills. "When you walk into a shop, and they're doing WebSphere Portal, Windows integration, AIX, and Linux, you need to have a pretty solid engineering bench," Kleinman says. "IBM has given us the tools with the Power products and all the stuff that surrounds the iSeries. It's up to the partners to execute. I anticipate a lot of the smaller business partners may have some trouble with the 'tidy up.' "

Without the new skills or solutions to sell, some of the smaller resellers have gone by the wayside, gobbled up by large resellers, such as Sirius, or they have gone out of business entirely. To entice some of those smaller resellers back into the channel, IBM has waived the requirement that resellers that have lost their relationship stay away for 12 months. The new i5 boxes are providing an opportunity to bring some of those resellers back into the fold, Allan says. "I think the 520 Express may cause some of those guys to come back," he says. "Where IBM could use additional feet on the street promoting iSeries is in the SMB [small and midsized businesses] space."

In addition to the man on the street, the man on the little screen could prove a boost to IBM's iSeries bottom line as well. And, of course, that means advertising on television and in other places. "You can't underestimate the value from the user perspective of hearing it from the vendor itself," Allan says. "Everybody's in agreement; it's a great box--the greatest secret people don't know about."

What everybody seems to be in agreement about is that nobody much cares about the new name "i5" one way or the other. "The renaming only makes a big difference if IBM comes through on [iSeries general manager Al] Zollar's comments, about more marketing and specific brand identification. Getting the message out on a broad scale is much more important," Computer Configuration Services' Kleinman says. "I think IBM is doing a good job with the messaging," says Sirius' Madigan. "The big message is Power5. The iSeries and pSeries, top to bottom. That message is very good because it's important for IBM to take on Sun Microsystems and Hewlett-Packard," whose customers are experiencing angst and anxiety over their vendors' processor roadmap.

John Keyes, president of Computer Keyes, won't be swayed by a name change. Keyes is taking a wait-and-see approach as to whether the i5 announcement will make any real difference in the market or drive sales. "Is it just a rename or a real change?" he asks. "When they changed the name of the AS/400 to iSeries several years ago, it was just a rename."

For Keyes, what's more important than rack mounting or faster processors is backward compatibility. The iSeries platform's extremely strong record of compatibility "is what makes it what we like. I believe IBM will make it upward compatible, even if it has to change the engine," Keyes says. At the same time, it is reassuring that IBM appears to be trying to grow the business by attracting new customers on the low end, with the new Model 520 Express and more advertising, he says. "Anything IBM does couldn't hurt," he says. "There was a lot of gloom-and-doom talk years ago, that this line of computers was just dying away. I certainly hope it doesn't happen, because it's a great business machine."

Backward compatibility is also important to long-time OS/400 ERP provider MAPICS, which announced support for i5/OS V5R3 with its flagship product, MAPICS ERP for iSeries, last week. Alan MacLamroc, MAPICS chief technology officer, called i5/OS and the new eServer i5s an "outstanding platform" for implementing his company's software. "We have a longstanding relationship with IBM and are pleased to continue to offer our iSeries customers the flexibility of implementing new IBM technology that is automatically compatible with their existing ERP solution."

Everybody reacts to big announcements in their own way. Some software vendors are skeptical, while some resellers seem perpetually optimistic. Al Grega, who has watched this business from within IBM, as well as from outside of it, says that this is indeed a landmark announcement for IBM. Traditionally, the iSeries' place in IBM's server family has been as a third child, where it gets technology "hand-me downs" from its eServer siblings, says Grega, who is now director of business development at Chicago-based software developer LANSA. "Now the most powerful chip on the planet is going into the iSeries first, on the low end. If that's not putting customers first, I don't know what is."