It is widely perceived that the AS/400 is a range on the run on the run from fellow mid-range IBM sibling the RS/6000. The reasons for the market paralysis caused by the launch of the RS/6000 have been detailed in Computergram before (CI No 1,493), they are that many mid-range users debating an upgrade will choose to wait and see what the RS/6000 can deliver in the field – especially System 36 users that have not yet moved to the AS/400. This wait is further compounded by confusion as to what IBM is up to with its AIX operating system – when will AIX become OSF/1 and why not wait until the two operating systems become one before opting for the RS/6000 route? The net result of all these problems being slowing sales of the AS/400 range and the possibility that users may delay buying the RS/6000 undil they know where they are in terms of an operating system and IBM agents such as Synapse unhappy about IBM’s mid-range strategy. Is this a scenario that IBM itself chooses to recognise? It will come as no surprise to most to discover that IBM chooses not to see its midrange systems in this hostile public light at all.
Ethereal topics
Yet IBM UK’s Application Business Systems Marketing Manager Henry Douglass appears anxious when asked about the AS/400 marketing strategy and visibly relaxes when the conversation turns to more ethereal topics such as Systems Application Architecture and AD/Cycle. He believes there is little overlap between the AS/400 market and the RS/6000 market. His basic differentiation between the two markets lies with user applications and an increasingly old-fashioned sales approach, which assumes that Unix users are of a more technical bent than those that would buy an AS/400. His sales pitch for the AS/400 is that its cost of ownership is lower than that of the RS/6000 because it is a highly integrated product sold complete with operating system and database manager tailored to take full advantage of its architecture. Other users might choose complex operational support and buy the RS/6000 because they are looking to integrate with other environments, have specific engineering applications they want to run, or they – and this must be difficult to square with traditional IBM think – may want to be responsible for their own environment. However, Douglass says that the AS/400 is a particularly attractive machine for for large organisations with mainframes, which require co-operative processing, since via SAA it has a high level of affinity with System 370 and 390 mainframes and with PS/2s.
– By Katy Ring-
New customers would probably be drawn to the AS/400 for itscommercial transaction processing and because they get a large database bundled with it. However, Douglass said that there is no distinct natural user base in vertical market terms for either the AS/400 or the RS/6000 because software developers are active in such a wide variety of markets that the choice of a proprietary or an open operating system will be made for other reasons. In some cases the use of an open operating system may be mandated, in other cases where technical computing is the dominant requirement – for statistical and financial applications as well as for science and engineering applications – the RS/6000 will come to the fore. John Glyde, IBM UK’s AIX Manager, tends to agree with Douglass that the case between an RS/6000 sale and an AS/400 sale will most likely be determined by government specifications or types of application. However, Glyde had slightly differing opinions when it came to the proportion of the market where applications do not lead to a clear-cut decision. He believes that new IBM sites, typically small businesses, might find an RS/6000 more appropriate than would a small department in a large company where the AS/400 would fit in better. He dismissed the idea that the RS/6000 was a complex sale, because value-added resellers tend to sell the machine as part of a package with a database and applications. He commented that we’re not in a theological debate when it comes to a mid-range sale. However, si
nce Douglass says that the same IBM salesforce sells the RS/6000 as sells the AS/400 it is hard to believe that there are not firmer internal guidelines for the positioning of the two products than transaction processing equals the AS/400, technical computing equals the RS/6000. Of course, it could simply be that IBM lets the user decide… Both Glyde and Douglass agree that the System 36 user base is fair game for the AS/400 sale, but not for the RS/6000. As Douglass puts it: if one takes as a given that the Systems 36 user’s current application set is meeting business needs, then it would be extremely unlikely he would move to the RS/6000.
Unibol
Glyde agrees that there is a natural route from System 36 to the AS/400. However, he is aware that Software Ireland has a product called Unibol which is a well-established migration tool from System 36 to Unix and which is used by a number of people. But, he said that IBM has no short-term plans to put RPG II on the RS/6000, since there is no great user demand to do this. Douglass denied that there was any particular slowdown in sales of the AS/400, adding that what slowing demand there is can be attributed to the rate of investment in the general economy. Douglass says there are always System 36 and 38 users who want to move up to the AS/400 – the trick is to find them. He is satisfied that agents are the right sales channel to have for the mid-range. He also says that by the middle of 1991 IBM will belatedly keep its promise to double the power of the AS/400 the top-end B70 model will be enhanced to deliver more than twice its current power with a machine offering around 17 IBM MIPS. And before you ask, no Douglass did not think that the consequent overlap in power with the low-end ES/9000 range would be a marketing problem.
