IBM vies for 3000 customers

Webcast to offer executive-level reasons to adopt iSeries

IBM is starting to turn its focus toward a customer base which closely resembles a loyal group of its own users, offering HP 3000 customers reasons and incentives to replace their systems with Big Blue’s iSeries servers.

IBM and one of its larger North American iSeries distributors is planning to host a Webcast to promote the iSeries to business executives at companies using HP 3000s. IBM will have to dispel doubts about the future of a proprietary computing platform — the same kind of assurances HP has been delivering to 3000 customers for years, at least until last November.

The head of HP’s 3000 business, Dave Wilde, said the AS/400 and iSeries may be the right fit for some customers who can’t migrate specialized applications. But he believes there are risks in joining another community which swims against what HP views as the tide of commodity computing.

“As those customers want to deploy new technologies, they’ll have integration challenges if they adopt an AS/400 now,” Wilde said. “Moving into an environment that is not growing for the long term and sustainable — I don’t believe that most people will want to switch to that sort of environment knowing what the future holds.”

But HP 3000 software vendors can get into an iSeries for a low investment, following the lure of 500,000 customers. Developers and consultants can lease an iSeries for 1.75 percent of the system’s price per month, putting the cost of a system at about $6,000 a year.

IBM is also building converts and relationships among the 3000 consultant community. Partners looking to supplement their steady-but-not-growing 3000 revenues are investigating the opportunity that the iSeries seems to offer.

“They blew our socks off,” said one 3000 expert of a May presentation at IBM’s iSeries headquarters. “This isn’t your father’s IBM.”

IBM’s AS/400 family tree reaches almost as far back as the HP 3000’s pedigree, starting with the System 3x servers in the late 1970s. In the late 1980s IBM made changes to that minicomputer to create the AS/400 line, migrating thousands of customers. Late in 1990s IBM transformed the AS/400 to the iSeries, consolidating on the same hardware design for Unix, Linux and OS/400-driven servers.

Customer considerations

IBM last mounted a broad push to lure HP 3000 customers during 1997, but found few converts among a customer base famous for its devotion to MPE. This year, now that HP has advised its 3000 customers to look elsewhere for computing in the future, some sites are considering the iSeries.

Despite their loyalty, customers who have run businesses with home-grown applications see potential in moving to off-the-shelf software. It’s an area where the iSeries holds a massive numbers advantage over the HP 3000. IBM officials and consultants in the iSeries market say the platform has more than 20,000 programs written for it.

Lane Rollins, IT manager for Portland-based Boyd Coffee Co. and a long-time HP 3000 user, said those applications would let him consider shifting to the iSeries.

“If you asked me a few months ago if I would go the iSeries route, I probably would have said no,” he said, adding that now, “You really need to take a look at the solutions available. The platform really should be a secondary consideration.”

Rollins said the transition that HP prompted with its November 3000 announcement and migration advice “is really an opportunity for us to fix some of the bad decisions that were made 20 years ago — so that we can take advantage of off-the-shelf software. In this day in age, why do you need to have a home-grown AR or order entry application?”

Computing at Boyd’s is handled by HP 3000s that cover manufacturing, distribution and manage a route sales system. Rollins said “We won’t be able to throw out all of the code we have, but we should be able to use more packaged software than we are.”

The HP 3000 was his preferred choice for the company, but OpenMPE futures discussed to date don’t hold any attraction for Boyd. The manager would rather move to another platform where technical advances are still an option.

At this spring’s Solutions Symposium, Boyd said he’d heard OpenMPE organizers say “they basically would put MPE in maintenance mode and not do any development. I lost interest. The market is getting more competitive every day. As a company we can’t afford to have our computing platform hold us back.”

Paying for performance

Holding back performance is a reality for both the HP 3000 and iSeries customers, however. While HP has elected to choke back the raw CPU speed of its A-Class servers through a software governor, IBM controls interactive performance of its iSeries using a hardware card. The difference appears to be that iSeries sites can pay for more performance within the low-end of the IBM product line.

David Bruce, IBM’s Worldwide iSeries Product Segment Manager, confirmed that adding a powerful, interactive configuration for the $14,000 bottom-of-the-line iSeries system runs the price up beyond $46,000. IBM calls the measure of performance for the iSeries Commercial Processing Workload — and buying 50 CPWs of what customers call “green screen” application performance adds $32,500 to a system’s cost.

IBM officials said there are a growing number of applications for the iSeries that don’t use interactive pricing, but the reality is that the fastest apps still require this serious boost in the sticker price. Al Barsa, a long-time consultant in the AS/400 and iSeries community, said that few customers pay list price for the systems, and a 15-20 percent discount is common.

“IBM feels that customers like to bargain when buying a system, which adds almost 100 percent overhead to the sales cycle,” Barsa said. He added that IBM would rather overlook the fact that green-screen applications make up the bulk of the iSeries community.

“In real life users would use a green-screen interface, which is not what IBM wants you to know about,” Barsa said. “IBM charges a huge premium for green-screen performance.”

A software product called FAST400 promises to let customers get around the interactive price boost. But IBM officials report that using FAST400 is destined to be a legal issue for customers who are trying to deploy it. Support agreements will be suspended until FAST400 is removed from an iSeries.

IBM said some newer applications built for client-server or Web client interfaces don’t need these CPW-boosting cards, called 5250 transaction monitors.

“We have options to buy the machines without it,” Bruce said. “For customers coming from the HP 3000, HP doesn’t have [such a monitor].” Bruce believes more than half of the available iSeries applications don’t need transaction monitors, but he said the architecture around 5250 drives the iSeries more efficiently than lower-cost alternatives.

“In the world of performance, 5250 is a far more elegant and streamlined performer than some more modern workloads,” Bruce said. Applications from software companies such as SAP, JD Edwards, Baan, and Lawson require this extra hardware expense.

Uncovering the true cost of such interactive performance isn’t commonplace among iSeries customer buying patterns, however. The majority of iSeries systems are sold by resellers including software or some kind of added value above the fundamental hardware and software, so the price tag reflects a bundled solution.

It’s this bundling that seems to make the iSeries an interesting option for HP 3000 sites who are migrating from the system. The iSeries includes the DB2 database, much like the HP 3000 includes IMAGE/SQL. These databases eliminate the extra expense of purchasing an Oracle or SQL Server license on something like an HP 9000.

Wading through sales effort

Including a database in the iSeries is prompting interest from Patrick McMahon, a 3000 system manager at Summit Racing Systems. “I am considering the iSeries now that IBM is making DB2 available on it,” he said. Providing a complete solution makes his transition away from the HP 3000 less costly, he added.

“I have a business to run, and it is not migrating computer systems,” McMahon said. “Any time or money I spend on migration is time and money that could be spent to further the business systems.”

While IBM woos such customers, these managers are aware they are being courted while feeling discarded by HP. “We feel that we have just been jilted,” McMahon said. He added that the interest shown in the 3000 customer has to be qualified. “I’ve been in the computer business for 37 years, and I must tell you it’s the sale that they are after, not you.”

Some consultants and resellers are advising 3000 sites on the move to steer away from any solution rooted in a single vendor’s price list.

“I want to minimize the risk of having another 11-14-01,” said Mark Wonsil of 4M Enterprises. “I will not recommend to any of my clients an architecture that locks them into a single vendor or solution. Full migrations are expensive and don’t add value to any business. That goes for HP, Compaq, and Oracle as well as IBM.”

But HP 3000 loyalists, offered a bundled solution with several thousand software suppliers, are taking first steps to explore the iSeries. “I am looking on eBay for an inexpensive AS/400 that would let us get our feet wet with what IBM has to offer, and see how different that is from the HP 3000,” said Jim Phillips of Therm-O-Link. Like others who are avoiding closer contact with Unix and NT, he’d prefer to believe in the potential of MPE’s future under OpenMPE, but is frustrated with a lack of news from the homesteading organization. The iSeries seems to offer him less complexity than Unix, and more stability than NT.

“I am not interested in moving to Unix of whatever flavor, and I can’t see Windows being robust enough to handle our processing requirements,” Phillips said. “I’d rather stay with MPE.”

At Lady Remington Fashion Jewelry, the HP 3000s working today are being measured against the potential of the iSeries. Al Karman just arrived in the shop, bringing his HP 3000 experience to a site considering a transition toward an platform which appears to have more software and human resource.

“We’re starting the discussions, but there’s strong direction towards the AS/400,” said Karman. “It plays open systems nicely, is supposedly not a bear to administer, has mucho software and an ever-growing talent pool.”

Even the most ardent HP 3000 advocates see the addition of another option as more leverage, at the least, when dealing with HP.

“I am adding the iSeries with OS/400 to my list of possible alternatives, with its ability to run AIX and Linux in other partitions,” said CIO John Wolff of LAACO, Ltd., which owns and operates self-storage businesses and private clubs in the western US. “I keep slapping myself, thinking this is all just a nightmare and it will all be okay when I wake up. But, alas, it is truly happening. I have plenty of time to evaluate my next choice — but the point is I have several choices other than HP.”