The Four Hundred

Armed with a Siebel call center app and the most complete database of OS/400 users on the planet, more than 400 IBM sales reps have been hitting the phones hard lately, spreading the Green Streak gospel. So far, more than 1,000 OS/400 shops in North America have bought Green Streak boxes, while nearly 4,000 more are considering purchases. Green Streak ends December 13, but IBM says its legacy will live on, because it now has a method and a mandate for contacting every iSeries customer, every quarter.

When IBM first announced its Green Streak promotion, on July 15, it didn't plan to "reconnect" with the 80 percent or so of OS/400 accounts it had labeled "dormant." Or at least it wasn't openly discussing it. It wasn't until the COMMON conference in Denver, Colorado, last month that iSeries executives, led by general manager Buell Duncan, started to voice their commitment to call every AS/400 or iSeries user, every 90 days. (The larger and more active shops already receive their calls, so that isn't of concern to IBM.) Since then, the promise to have an IBM representative place a courtesy call with every AS/400 and iSeries user on a quarterly basis has fallen to two of Duncan's lieutenants, vice president of iSeries sales Paulo Carvao and vice president of marketing Cecelia Marrese, both of whom have taken their new jobs within the last six months.

As it turns out, Green Streak, which gives customers 50 percent discounts on specific iSeries Model 270 and Model 820 servers, has been an ideal entry vehicle for IBM's larger campaign to reconnect with forgotten OS/400 users. With a modest amount of interactive CPW and a generous dose of server CPW power, these servers are specially configured to appeal to those small and midsized shops that still want run their older 5250 applications but would like to add new types of workloads that would have been too expensive before, such as WebSphere.

For Carvao, who took his new job two days into the Green Streak promotion, Green Streak is all he's ever known in his new position. He has logged more than 60,000 air miles making customer calls and visiting with ISVs and resellers in the United States and Canada. Carvao has also kept in touch with the Green Streak call center operation, which includes 350 IBM sales and technical specialists and 50 additional ibm.com lead activation specialists. So far, the team has called more than 50,000 dormant AS/400 shops in North America (those that haven't upgraded to new iSeries technology), and Carvao expects his team to make first contact with the remaining 17,000 customers in North America by Friday, December 8, a week before deadline.

Carvao says the hard work is paying off. "Green Streak has been very successful so far, both in terms of generating pipeline opportunities, as well as closing them," he said. "When I compare the volume of business today, it's about 20 percent bigger than last year. We attribute most of this increase to Green Streak."

As a result of Green Streak, Carvao said, IBM will actually gain market share, in terms of iSeries units shipped during the fourth quarter of the calendar year compared with last year. The fourth quarter is typically the hottest time of the year for making iSeries sales, and this fourth quarter is shaping up to be a scorcher, particularly at the low end. Besides the 50 percent discounts offered through Green Streak, IBM Global Financing is offering very generous terms through its recently announced "triple zero" offer, which gives small and midsized customers spending $25,000 or more the option of choosing a financial package with zero down, zero interest, and zero payments for a period of months. Previously, only companies spending much more money could qualify for such generous terms.

Even with a smoking fourth quarter, however, the iSeries is unlikely to overcome what has been a very poor overall showing for the year. In August, Gartner Group forecast that the iSeries would bring in about $1.9 billion for the year, about $1 billion less than 2001, when it shipped 39,000 iSeries units. For the quarter, which ended September 30, the iSeries brought in about 20 percent less, or about $400 million, than it had last year, when it brought in $500 million for the quarter.

This is why it's important to take any momentum generated in the fourth quarter and continue to build upon it in 2003, Carvao said. And a key part of that strategy is to continue to call on every AS/400 and iSeries shop, every 90 days, for the foreseeable future. "Green Streak has been put in place as the reconnection engine," Carvao said. "Looking forward, it's absolutely key to understand that, come December 13, we're done [with Green Streak]. Rather than discuss pricing and promotion in the future, what I'm interested in is staying in touch with these customer and their business requirements, and how they're continuing to invest in iSeries."

Carvao declined to discuss specific sales and marketing promotions IBM is planning to push through its newly built "reconnection engine" for 2003, as he still has high hopes for closing the nearly 4,000 Green Streak deals still in the pipeline. Obviously, premature disclosure of new deals could jeopardize IBMs' chances of closing them. But Carvao did give some clues about the general direction that IBM's iSeries sales and marketing efforts will take next year.

"Our big push would be to add solutions to this discussion," Carvao said. Next year, IBM plans to bring more ISVs to the OS/400 platform to solidify its presence in the vertical markets that have been its stronghold, including manufacturing, distribution, retail, and financial services, Carvao said. In fact, so far this year, more than 200 new applications have become available on the OS/400 platform, Carvao said, which contradicts the popular notion that ISV excitement for the platform seems to be stagnating. However, most of these new applications arrived on the platform via ports from Java, Linux, or through PASE (OS/400's AIX runtime environment); little new development seems to be occurring in native OS/400 environments.

In terms of technology, the strategy next year will be to expand the iSeries' presence in customer accounts by introducing new workloads. Carvao emphasized that traditional OS/400 workloads will not be targeted for replacement (which the OS/400 faithful could interpret as a potential exit strategy for IBM to rid itself of the platform). Instead, IBM and its business partners will work to increase the amount of e-business, Linux, and server consolidation workloads running on iSeries servers.

While the last 12 months have seen the introduction of numerous special-purpose "Bumblebee" iSeries machines--including those designed to run J.D. Edwards, Intentia, Linux, and WebSphere workloads--the Bumblebee servers will not be a priority in 2003, Carvao said. Instead, IBM will concentrate on executing a number of joint marketing campaigns with its ISVs.