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  • Mad Dog 21/21: Nice Clients, Shame About The Servers

    October 28, 2013 Hesh Wiener

    Reporting quarterly results, Microsoft said business customers are buying tons of software, more than offsetting a slump among consumers who prefer tablets to PCs. That’s a mixed picture, but a cheerful story compared to that of IBM. Big Blue’s best-selling computers are Linux engines for mainframes. Power server revenue is down 38 percent at a time when, paradoxically, the market is offering IBM a superb opportunity: There are TN5250 and TN3270 apps for the newest tablets and smartphones, even models still in the pipeline. Yet IBM is moping when it should be throwing a Bring Your Own Green Screen party.

    The IBM situation isn’t as bad as it looks. It’s worse. IBM had to ship nearly twice as much mainframe Linux computing power as it did the year before to eke out a 6 percent gain in revenue for its flagship server line. The Power debacle, which IBM blamed on lousy sales in China and other developing markets, exposed a terrible flaw in the company’s strategy: Too much dependence on the emerging markets.

    IBM’s Hardware Business: In the most recent quarter IBM hardware accounted for a bit more than $3 billion of total revenue that reached nearly $24 billion.

    IBM’s financial report was not just bad news for investors, who of course took a haircut the minute the story moved on the newswires. The dismal data also discouraged IBM customers who depend on their relationship with Big Blue to reinforce the bonds that tie them to their careers. At every IBM shop where the presence of Blue iron is under threat, meaning pretty much everywhere, sales reps with alternative systems use IBM’s poor results to humiliate IT executives who like their IBM systems and software. And right now, with IBM’s most serious adversary, Microsoft, is hardly immune to critical comment. Yes, its enterprise business is doing well, but sales of Windows on consumer PCs is down 22 percent and shows no sign of improving. Microsoft’s effort to get into the mobile device market has been worse that a failure. It has been a disaster, with consequences that include the end of a lifelong career for CEO Steve Ballmer.

    IBM is could capitalize on Microsoft’s woes, if only it knew how. It has products that compete directly with Microsoft’s leading offerings, such as Exchange and SQL Server. It has unmatched technical depth. It has expertise in hardware as well as software. It has stature the world over, not just among customers and business prospects but among investors and governments, too.

    Main Hardware Segments: All told, servers brought IBM about $2 billion in the most recent quarter, a smaller number than most users imagine is the case.

    But you don’t have to take my word for this, and you probably shouldn’t. You should instead take a look at a company that bet its future on the viability of IBM’s environments and the expectation that IBM’s customers will happily embrace a mobile client future with the same enthusiasm they have displayed since the days of 5250 and 3270 green screens. MochaSoft, based in Denmark, is a great example. Since the late 1990s, MochaSoft has been selling terminal emulation software that lets a wide range of clients access IBM’s proprietary i and mainframe servers, various Unix systems, Windows servers, and other servers that support the public domain VNC remote desktop protocol.

    MochaSoft products, such as its TN5250 offering, come in versions that run on Apple mobile clients including iPhones and iPads, Android clients (version 2.3 or later, and later is better), Macs running OS X, Windows PCs running everything since XP, mobile Windows (including the old Phone OS as well as the current RT environment), Blackberry (!), and in some cases ancient code going back to MS-DOS, although users hoping to get TN5250 to work on a Flintone machine would be wise to get in touch with MochaSoft.

    The Bottom Line By Product Line: IBM’s server sales were down sharply except for mainframes, boosted by new machines and fire sale prices on mainframe Linux engines.

    But MochaSoft isn’t mainly about using old (or new) clients to talk to old (or new) IBM servers (or other manufacturers’ Unix boxes). MochaSoft is about embracing the future without necessarily deserting the past, particularly if the past includes some application systems that have continuing value and utility. Here is my favorite bit of evidence.

    One of the top contenders to leadership in the tablet market is Amazon. Its Kindle Fire line of mobile clients uses a forked version of Android. The latest OS for Fire hardware is called Fire OS 3.0 Mojito, and it is aimed at users who want access to electronic media including books, music and videos.

    Underneath Mojito is a recent but not the latest Android system, an environment that is different from the pure Android of Google Nexus devices and the Google-supported Android variations offered by various client device makers, such as Samsung, HTC, Asus, Motorola and Lenovo. Versions of Android blessed by Google can be used to acquire apps from Google Play Store. That’s not the case with the Amazon Kindle Fire. Instead, the Kindle Fire gets its apps from Amazon’s own store, and it’s not a place that offers the half million products Google makes available. There are plenty of apps for the Kindle Fire, tens of thousands of them, but there are probably four times as many apps in Googleville as in Amazonia. Nevertheless, one can go to the Amazon app store and get MochaSoft TN5250 for a Kindle Fire including the latest models and, by every indication, the even newer Fire devices that will be coming to the market in time for this year’s Christmas season.

    So, while IBM’s server sales force may be financially constipated, MochaSoft thinks IBM’s customers are in good health, proud of past achievements and eager to retain access to IBM i based services in the future. If that IBM i future includes old applications and those applications happen to be entangled with a green screen culture, well, that doesn’t bother MochaSoft in the least. The app company’s financial officers are happy to sing about traditions on their way to the bank.

    While many IBM i shops might prefer to modernize and webify their apps so just about any client with a browser can access them, in this imperfect world not every shop can do this. Also, there are lots of situations in which an i shop doesn’t want to update anything at all, as long as end users have a means to use proven programs and procedures.

    Of course all this technical capability might seem nice, but what would really be nice is to provide a pleasing answer to the question: What does it actually cost? Turns out that MochaSoft gets less than $30 a seat for its TN5250 app and it’s happy to talk about reduced fees for site licenses at shops with armies (or even just squads) of users. The license fee includes updates, just the way it does on every other mobile app. The most recent TN5250 update was beamed out in September and there will be more coming down the wire as Android moves to Kit Kat, Apple rolls out the inevitable patches for its latest devices, Amazon deploys Fire OS fixes, and Microsoft takes yet another shot at the ever-moving mobile client target.

    RELATED STORIES

    Power Systems Sales Hammered Down In Q3

    IBM’s Systems Biz Returns To Profitability In Q2

    What Is IBM Going To Do With Its Systems Business?

    Systems And Strategy Execs Switch Roles At Big Blue

    Will Big Blue Deep Six Its X86 Server Biz?

    Power Systems Sales Stalled–Again–By Power7+ Rollout

    IBM Mainframes Jump, Power Systems Drop Ahead Of Power7+ Rollout

    Tough Slogging In Q3 For IBM, Like Everyone Else

    Big Blue Cranks Up The Profit Engine In Q2

    IBM Loses Money On Hardware In Q1

    Server Sales Slump A Little In Q4

    Power Systems Eating Into Mainframe Sales



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Volume 23, Number 37 -- October 28, 2013
THIS ISSUE SPONSORED BY:

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Table of Contents

  • IBM Wraps Up New PureFlex For IBM i Bundle
  • Budget For Infrastructure And Shared Systems, Say IBM Top Brass
  • Big Data, OpenPower Are Big Levers For Power Systems
  • Mad Dog 21/21: Nice Clients, Shame About The Servers
  • Being CIO At IBM Means You Are IT
  • Reader Feedback On Modern, Free-Form RPG New Bloods
  • Nothing Funny About Latest IT Jobs Numbers
  • Avnet Makes Up Server Decline With Software, Storage, And Services
  • ‘Puffery’ Claim Leads to Another Delay in Maxava-Vision Trial
  • Cloud and HANA Grow, Software Slows At SAP In Q3

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