The Michael Moore lesson IBM still hasn’t learned leaves it floundering in personal computers
It is hardly news that IBM is no longer numero uno in the personal computer business. But the successive quarterly reports of market research groups documenting IBM’s slippage can hardly be accepted with complacency. IBM ought to be first. Its PowerPC chips have revived Apple. Its huge revenue, its worldwide presence, its vast corps of service technicians and its army of software specialists ought to enable IBM to win most of the big corporate orders and a large slice of other submarkets. Its ability to define large systems and its leadership in commercial mid-range computers would, one supposes, make it easy for IBM to tack its personal computers on the end of every cable attached to one of its central machines. But IBM has for the past year been unable to perform very well. IBM’s setback occurred in the immediate wake of management changes that promised to give it the qualities that seem to be most important in desktop computing: faster reflexes, slimmer operations and a willingness to bend to both the whims and the wisdom of the marketplace. At the time, it seemed that the company’s most difficult problems were the decline of the mainframe and the Unix assault on the AS/400. The personal computer business looked to be the easiest to improve, if it needed improvement at all. How different it has all turned out! While the mainframe business is certainly smaller than it was a few years ago, IBM is buried in orders for its large engine machines and similarly unable to meet demand for 9672-R CMOS processors. Unit sales of AS/400s will be up this year and, despite considerable price cuts, IBM’s revenue from the minicomputers will rise a bit, too. Yet IBM’s personal computer business has been disappointing. We think a solution must begin with direct experience. IBM may be delivering tons of information to personal computer users via its Prodigy partnership, but it is definitely not doing as well for its employees or big customers. IBMers and customers still must use very primitive systems to obtain information about IBM’s products and services. The data is very helpful, but the mechanism is not merely awkward, it is symbolic of IBM’s disinterest in reaching out to end users. To get back on top in the corporate workstation business, IBM must become adept at using the machines it makes. And the process must begin at the top. The provocative American documentary filmmaker, Michael Moore, who challenged IBM chairman Lou Gerstner to come down from his headquarters suite and format a floppy diskette was right on target. C’mon Lou! Let’s see you log onto Prodigy!
Third party memory could extend the 9121’s life
As computers get older and less valuable, users sometimes take unusual measures to preserve their investments in the machines. The problem becomes more difficult if the ageing machine must support a growing workload. One option – not a wildly popular one – is to install non-IBM memory. Depending on the amount of IBM memory in a 9121 and conditions in the market, a customer might be able to sell a block of IBM main memory, buy a larger chunk of compatible memory and end up spending very little money. The reason, of course, is that used IBM memory usually commands a good price in the market, while non-IBM memory, even new, can be comparatively cheap. There are two companies making memory for 320-series 9121s, EMC and BSM. EMC is known the world over, mainly for its Symmetrix disk subsystems. BSM, in Shaumberg, Illinois, is obscure, at least among end users. It is a small engineering firm that sells IBM-compatible mainframe memory mainly in the trade. The BSM circuitry is then remarketed by, for instance, a leasing company. When it comes to 511-based systems, there is no IBM-compatible memory yet. But this month, BSM says it will begin shipping its version of boards that are called Treasury and Liberty in the trade. They use circuits that run at 3.3V and 3.6V, so they use less power than the 5V circuitry in
the Colt memory used on older 9121s. EMC is apparently working on 3V boards, too, but we don’t think EMC will have them ready as soon as BSM. Gossip in the industry suggests that BSM, though hardly a giant like EMC, is making some pretty good hardware and there is a 9121 at MIT that may soon turn out to be a showcase for a half Gigabyte of BSM memory. If MIT can’t break it, then the chances are it will work anywhere. BSM has just completed its first installation in Italy and is very quietly seeking business in Germany and France. The Italian deal was done in conjunction with a local mainframe trader, and that is probably the only way little BSM can get customers so far from its home base to accept its products.- by Hesh Wiener From the December 1994 edition of Infoperspectives International, published by Technology News Ltd, 110 Gloucester Avenue, London NW1 8JA, phone 0171 483 2681. Copyright (C) 1994 Technology News Ltd.
It can’t last, it can’t last.. EMC beat IBM in disks last quarter
By every indication, the vendor that shipped the most mainframe disk capacity last quarter was EMC Corp. Not IBM, not Hitachi, not StorageTek. EMC. And its momentum should carry it safely into the first half of the current year. This is not merely a notable development; it is remarkable. EMC came out of nowhere or, more accurately, Hopkinton, Massachusetts, an even more obscure place, with its fast Symmetrix storage subsystem. Two years ago, cynical disk traders and incredulous IBMers were saying that EMC could’t even get its foot in the door at most major accounts. Now they concede that something quite different happened: EMC has jammed its foot, equipped with a steel-toed boot, far into one of IBM’s formerly well-protected areas. Rather than dwell on their errors, industry observers are now predicting the imminent decline of EMC’s market share, power and possibly financial health.
Intoxicated
The party line (and it must be a party because this crowd sounds thoroughly intoxicated) is: Were it not for a mere glitch or two or three in IBM’s execution of a brilliant strategy – it can’t ship very many disks, the disks are too small and the direct attach models don’t provide key features – EMC would already be calling up Ryal Poppa at StorageTek for the names of some good bankruptcy lawyers. Well they’re wrong. EMC will have to work very hard to maintain its position. It has got to keep enhancing its products so they provide more bang for the buck. It must develop allies among the leasing companies. It must offer RAID capability on Symmetrix or alternatively unveil a similarly peppy subsystem using RAID technology. But EMC knows this and has known it all along. We don’t want to underestimate the role of good luck in EMC’s present situation, but we don’t think it is very wise for IBM to overestimate it, either. We recall that Microsoft once got lucky because the head of the company with the CP/M personal computer operating system acted like a jerk. IBM never took that lucky kid Gates seriously until it was too late. Only now, sifting the ashes in vain search for a Phoenix, has IBM begun to comprehend the magnitude of its foolishness. IBM hasn’t lost confidence in its disk business, although its manufacturing is leaving the country for a spanking new plant in Singapore. EMC, still using Seagate Technology disks made in the USA, will undoubtedly be at a disadvantage, particularly when that expensive labour force has to be retrained to double the capacity of the drives to 18Gb in the coming months. Why, EMC will probably only be able to pass along a 50% price-performance improvement to its customers, unless, of course, it decides to do better. But IBM fans should not lose faith. It will probably take Seagate (or one of the other disk suppliers courting EMC) until 1996 to get 30Gb into a 3.5 drive and bring raw disk prices down to five cents a Megabyte. That means it will be another 18 months or so before EMC can offer a disk module with the capacity of a whole Ramac rack in the box IBM’s lunch (which EMC
has eaten) was packed. By then, IBM is bound to be way ahead. Right?
