But Wait, There's More

iSeries-to-i5 Upgrade Prices Go Up January 1

If you are mulling an upgrade from an iSeries machine to a more modern i5 box, you might want to think about getting the lead out before the end of the year. On January 1, 2006, IBM will be raising upgrade prices from iSeries 8XX machines to i5 machines. The price increases range from a low of a few percent to as high as 49.2 percent, so you might want to take a look at the IBM price change announcement and figure out if you can squeeze the upgrade into your 2005 budget. The average price increase across the upgrades is 12.5 percent and represents an increase of $30,000, which is not small potatoes to most OS/400 shops.

In a document posted on its Web site, IBM said is changing the prices to reflect the fair market value of the older iSeries iron, which has declined in the wake of the i5 announcements. This is, of course, a bit of hoo-hah, since IBM essentially controls the second-hand market in iSeries iron and IBM's upgrade pricing is the single most important factor in determining the value of any used equipment. If IBM lowered its upgrade pricing tomorrow, those machines would all be worth more money. The fact that IBM is raising prices on iSeries-to-i5 upgrades now has more to do with its desire to sell some i5 gear than some theoretical market value of used equipment. The point is, IBM is giving iSeries shops fair warning, as it did in December 1999 and October 2001, that upgrade prices are going up.

IBM Cuts Some Software Maintenance Prices on the i5s

Here's something you don't see every day: a vendor cutting software maintenance and support costs. But last week, this is precisely what IBM did with certain Software Maintenance fees for the i5 line. The 37 percent price cut is not across the board, but rather on specific Software Maintenance features, as follows:

• 5733-SPE, feature 0002 (three-year registration uplift to 24x7 coverage for P05 server tier), was $319, now $201
• 5733-SPE, feature 0004 (three-year registration uplift to 24x7 coverage for P10 server tier), was $794, now $500
• 5733-SPE, feature 0006 (three-year registration uplift to 24x7 coverage for P20 server tier), was $1,058, now $667
• 5733-SPE, feature 0008 (three-year registration uplift to 24x7 coverage for P30 server tier), was $1,588, now $1,000
• 5733-SPE, feature 0010 (three-year registration uplift to 24x7 coverage for P40 server tier), was $1,588, now $1,000
• 5733-SPE, feature 0012 (three-year registration uplift to 24x7 coverage for P50 server tier), was $1,588, now $1,000
• 5733-SPE, feature 0014 (three-year registration uplift to 24x7 coverage for P60 server tier), was $1,588, now $1,000

IBM did not, obviously, cut its Software Maintenance fees across the board. Software Maintenance costs from $3,240 per processor for three years of coverage on a P05 machine to $16,200 per processor for three years of coverage on P30 through P60 machines. A single year's coverage ranges from $1,200 per processor on a P05 machine to $6,000 per processor on P30 through P60 machines.

Aberdeen Report Pegs Growth in Midmarket ERP

Now that they have gone through an extended belt-tightening exercise, mid-sized enterprises are beginning to focus their attention on building revenue and are willing to turn to technology to accomplish these goals. That's what the latest research from Aberdeen Group reveals anyway. According to "ERP in the Mid-Market Enterprise: The 2005 Benchmark Report," a significant portion of the midmarket is relying on core business applications to provide competitive advantages.

For the purposes of this research, Aberdeen Group surveyed primarily manufacturers that assemble components from parts and distribute those products. Epicor Software, a company that specializes in customer relationship management, supply chain, and financial accounting technologies sponsored the report. Aberdeen also conducted a similar report in 2004, which provides a basis for comparison in its trend analysis.

Based on its survey results, Aberdeen concludes that 77 percent of midmarket firms have made revenue growth their top priority. Lowering costs, which one year ago was gaining the most attention, remains a major factor in these shops, but only slightly more than half of the respondents rated it as their major concern.

Expanding the revenue and customer base have become the most powerful drivers for many mid-sized companies, where an emphasis on customer satisfaction, staying competitive, and controlling costs continue to dominate conversations between IT and business executives. Katherine Jones, author of the report, says these firms are ready for a technology overhaul, which could include newly installed software, hosted solutions, or outsourced services.

"The mid-market is beginning to invest in technology to get ahead. Prime examples of that investment in the next 12 months are in supplier relationship management, customer acquisition and retention tools, and technology to help companies hire better talent--and then retain that talent," Jones says. "Chief technology directions are toward implementing ERP suites, integrating existing business applications where they aren't already, and moving toward enterprise-wide consolidation on applications and infrastructure."

One of the indicators identified by this survey is that ROI on current ERP systems is less than 50 percent. This leads to two conclusions: Either companies are not taking full advantage of what they have or the solutions aren't providing it.

Rather than refuting the idea that technology is the answer, the analysis reveals flaws in many existing systems. To begin with, companies are faced with integrating fragmented business applications. Only 26 percent of those surveyed have suitably integrated applications, while 60 percent say they are ready to make it happen this year. Slightly more than 10 percent indicate they will be replacing existing solutions in order to achieve this goal.

The report also points a finger at companies that cling to solutions as long as they provide adequate use. Many have grown and applications have not kept pace. This is particularly true with financial applications. When firms rely on old applications, bottlenecks occur due to increased volume, heavier transaction loads, and higher performance requirements.

Although many situations show signs of IT development falling behind overall company growth, Aberdeen identifies the roll-your-own applications as often being particularly expensive to maintain. It also notes that companies that have traditionally done much of their own application development complain about off-the-shelf not meeting unique needs. Aberdeen claims that much of this criticism is unwarranted.

Much of the blame, according to the report, relates to the length of time ERP applications have been deployed. The survey shows that 21 percent of those responding have applications older than 5 years and 29 percent have applications that are three to five years old.

Jones recommends companies answer these questions about their existing ERP systems:

• Is the solution adequate?
• Does it work?
• Are there performance and uptime issues?
• Are other business requirements unmet because application features have not kept up with needs?
• Are costs in line with results?
• Are support and maintenance costs in line?
• Will hardware and network costs increase due to upgrade requirements?
• Is excessive data entry required because of disparate applications?

Click here for a complimentary copy the complete report.

Ex-iSeries GM Flogs Microsoft in His Blog

Remember Buell Duncan? He was iSeries general manager three GMs ago. Now he sits atop the ISV and Developer Relations unit inside IBM's Software Group, where he is responsible for alliances and programs with independent software vendors and solution developers. From time to time, he likely butts heads with a Microsoft executive in a similar position when both are courting software vendors. Back when he was doing his iSeries duty, Duncan always seemed to enjoy his meetings with the press. So much so, apparently, that he now authors his own articles and publishes them in a blog, which you can find here.

In his latest soapbox moment, Duncan revisits one of his favorite iSeries topics: customer loyalty. He wraps it around the concept of growing a customer base by offering value. Then he drops the hammer on Microsoft by pointing out that company's policy of collecting its licensing fees before the user can pass along value to customers. It could be a vendor that then has to sell wares to a business or it could be an IT department trying to be a profit center within its own organization. What Microsoft does, Duncan opines, is like a forced tax, and it puts a crimp in the amount of value delivered and the returns gained. Got any more bullets in the gun, Buell?

Keep an eye on his blog for updates from this vigilante man.

Net Revenues Drop, but Net Income Shines for NetManage

NetManage, a software company that specializes in Web access and enterprise information integration, announced its financial results for the third quarter ended September 30. Although net revenues for the third quarter of 2005 were $9.9 million, a slide compared with net revenues of $11.6 million for the same quarter a year ago, net income for the quarter increased to $1.6 million, compared with net income of $863,000 one year earlier.

For the first nine months of 2005, net revenues were $32.7 million, which also shows a decline compared to net revenues of $34.5 million for the same period of 2004. However, net income for this time frame was $3.1 million, compared to net income of $689,000, for the same period of 2004.

During the third quarter of 2005, NetManage secured new and renewal business from some big customers, including Radio Shack, U.S. Bancorp, the city of Philadelphia, Campbell Soup Company, the U.S. Department of Justice, the U.S. Senate, the California Department of Motor Vehicles, Abbott Laboratories, and BellSouth Communications.

Hard-Core Tech Training Offered at Lotusphere BootCamp

Two years ago, IBM altered the emphasis of its annual Lotusphere event after attendees sounded off about how they believed the available technical training was on the downhill slide. To its credit, IBM made noticeable changes in 2005 and for 2006 it will introduce "BootCamp," a conference-long curriculum consisting exclusively of highly technical sessions, with a heavy focus on practical application.

Although early morning bugle calls and 10-mile marches are not officially on the agenda, BootCamp should provide the in-the-trenches content that many Lotus soldiers crave. IBM describes it as a program that lets attendees drill down from hands-on workshops to corresponding breakout sessions, certification prep courses, and "Meet the Geeks" discussion groups, which will be led by subject matter experts and members of the Lotus product development teams.

"Each year, the number one piece of feedback we receive from Lotusphere attendees is a request for more technical content," says Kristin Keene, who has been at the helm of Lotusphere content development for nearly ten years. "And while we have certainly increased technical content every year, this year, with Lotusphere BootCamp, we're taking the quantum leap of delivering a new, parallel, end-to-end program of nothing but highly technical content that in itself is the size and scope of your typical technical conference--and that adds three times more technical sessions to the show overall."

BootCamp sessions run at the same times as other Lotusphere sessions, enabling attendees to jump in and out of camp at will. Depending on their interests, they can attend the BootCamp exclusively. A large percentage of BootCamp sessions will be repeated throughout the week, so scheduling conflicts can mostly be avoided. "BootCamp can make it much easier for attendees to justify Lotusphere as a great place to invest dollars allocated to training," Keene says.

And don't get the impression that BootCamp will be all work and no play. Campers also get to participate in an entertainment event called JAMFest 2006--outdoor jam sessions where attendees share the stage and their musical talents.

"The Lotus community is notorious for being multitalented, and one of those talents is music," says Keene. "The BootCamp program is such a throw-back to the no-frills developer conferences of the past, and nothing was more common at those conferences than an after-hours pick-up jam session."

Lotusphere 2006 takes place January 22 through 26 in Orlando, Florida. For details and registration information, click here.