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September 18, 1990

“OUR AS/400, SYSTEM 36 USERS SIMPLY COULDN’T BE HAPPIER,” IBM UK INSISTS…

By CBR Staff Writer

Despite the fact that IBM has already broken its 1988 promise to double the performance of the AS/400 family every two years, the company says that its UK customer base is highly satisfied with the mid-range machines, and the recent low-end announcements have only served to enhance satisfaction by providing a lower entry price and easier migration route for System 36 users. It is a theory that doesn’t quite fit speculation that IBM UK is doing so badly in the mid-range that it merited a visitation from John Akers, and that it is nowhere near sales targets for 1990 (CI No 1,493). According to Mark Ryan, director of market support for Application Business Systems, AS/400 revenue growth between 1988 and 1990 has been running at around 20% per year, and the manufacturing facilities – in Italy – are operating at full capacity. IBM says that on a worldwide basis, 30% of AS/400 installations are new business and between 42% and 43% are migrations – which implies that about a quarter are either replacing small 4300s or going into remote sites at 4381 or 3090 shops. The company expects to extend the range by June 1991, and says that the new models will be twice as powerful as the B70 and offer a potential throughput of 100,000 transactions per hour. Nonetheless, IBM is still capable of adopting a defensive stance when it comes to the AS/400 vis a vis the System 36, and the RS/6000. Everybody knows that there are many System 36 users that feel that IBM left them out in the cold for far too long, although IBM says it doesn’t understand how they can accuse it of neglect. Ryan says that it would have been unrealistic to expect System 36 users to convert overnight – although two years can hardly be described as a Pauline conversion – and he acknowledges that many are happy to chug along on the older machines unless there is compelling reason to change. It is possible that that the Y10 may provide a stimulus, but it is equally possible that it is too late. IBM may think that the RS/6000 and AS/400 address different markets, but the notion of resellers of the IBM RS/6000 Unix machine knocking on System 36 doors and offering them a more powerful alternative upgrade route at a lower price than the AS/400 is not totally unrealistic, and IBM may find that users are not satisfied with the co-existence currently on offer. – Janice McGinn

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