• Subject: Re: IBM Spin Doctors on AS/400 Marketing
  • From: "Chris Rehm" <Mr.AS400@xxxxxxx>
  • Date: Sun, 26 Oct 1997 11:39:06 -0700

>Well, the bitch was that we disagreed with the way the money was spent. 
>situation has not changed.  As an AS/400 professional, I still have to
>_SEARCH_ for any advertising related to the /400.  The ads that I
remember in
>1980 attracted my attention even though I _WASN'T_ an AS/400 professional.
> "Computer Geeks" don't buy AS/400's, Management does.  If management
>familiar with the box, management buys what they learned in school (HP/9K,
>DEC, or Tandem).

Bullshit. "I want a new GL/AP system, buy me that HP I learned about in

No freaking way. 

Customers care about their own business. I just can't picture a VP of
Finance calling the MIS department and saying, "Hey, I just saw a great
advertisement for an AS/400. Is there some way we can get one of those to
do accounting with?" 

People buy solutions. Hardware is only the solution if the problem was

This is the whole point of the direction IBM is taking with the AS/400. It
is an opportunity for the AS/400 to be a solution for other people's

Right now, buying an AS/400 solution is a whole package,
hardware/OS/software. When you advertise an AS/400 to someone, you can't
sell it to them, you can only build brand name recognition (which is
important). If you want to sell the AS/400 to them, you have to sell them
a software solution first. Management will not sit through a demo of how
wonderful AS/400s are, but they will spend several days demoing how
wonderful a software package fits their business. If this sells them, they
aren't really too concerned about the hardware (but that doesn't mean it
is completely unimportant).

>Yes, IBM is performing.  The problem is, nobody but "us chickens" knows
>it.  I agree with the earlier comments about getting college students
>about IBM.  Given their current problems, Apple probably wouldn't be in
>business today had they not indoctrinated a legion of youth into their
>systems by giveaways to school systems.  IBM should do the same, IMHO.

IBM still does giveaways. http://www.ibm.com/IBM/ibmgives/ is the web page
about IBM's philanthropy. I haven't really read it, so I can't give you
much info on it.

But the issue is really: What should IBM give to schools? 

We, as AS/400 professionals, feel like this should be AS/400s. Believe me,
I would LOVE to find that IBM was supplying AS/400s and support to
secondary and higher education. I would volunteer some of my time to
assist in supporting schools in my area to help implement and keep these
machines mainstream. 

But is that a waste of money for IBM? Does IBM make more if you are buying
AS/400s than if you are buying IBM PC based servers? Is it enough more to
justify such a giveaway program? I think those are the factors that IBM
must wrestle with. That's because they are in business to sell computer
hardware, not necessarily AS/400 hardware.

>Again, _WE_ don't buy the systems.  We need people in management excited
>about the AS/400.  I understand the premise, but IBM's current suite of
>"e-business" ads promote NOTHING.  In their attempt to remain neutral

Wrong. They promote IBM as a vendor of e-business solutions. That is what
IBM is in business for. 

>I don't know about everyone else, but that policy led to _DISASTER_ here
>the /400 was first announced.  Local IBM sales rep's aren't well-versed in
>available packages from BP's worldwide, so they recommend a "local" that
>isn't really a fit for the client's needs.  For example, a local retail
>client ended up with a package originally designed for a potato farm!

That is exactly why IBM's plan has changed so much. IBM doesn't want to be
the guy sitting and selling to the end user. They want that to be the
business partner. The partner needs to be qualified with the solution
being offered. 

There is no doubt that the change in marketing has been difficult and
still can use a lot of improvements. If IBM were to try to go back to the
"old way" there would just be a big closing of doors and a big "going out
of business" sale.

>>  Rochester needs to get business partners to support IBM's midrange
>>  systems. That means the AS/400 and the RS/6000. If you think it is
>>  plausible that IBM produce all the software solutions to everyone
>>  business problems you are mistaken. Since IBM must shave the margins on
>>  hardware they attempt to get business partners to assist in marketing
>>  machines. In other words, IBM gives out a discount to you as a business
>>  partner that you can either use as profit margin if you are creating
>>  enough of a demand by strong marketing or you can pass along to your
>>  customer so you can make money on your software product or support
>>  services. 

>I'd like to hear what the BP's are pushing _BESIDES_ the above!  IBM has
>out of the (applications) software business for years, and most people
>that.  No offense, but don't give _ME_ that "margin shaving" business!  A
>(possibly) multi-million dollar Business Partner is supposed to provide
>advertising for a multi-BILLION dollar hardware manufacturer in hopes of
>selling a few copies of their software?  I don't think so!

Then you should pay attention to the realities of the situation. 

What are you after? A really big AS/400 ad with 10,000 business partners
and 100,000 software products listed? Doesn't the futility of trying to
advertise in that direction strike you? 

A distribution software vendor should advertise their software in a
distribution magazine or other such distribution related areas. IBM should
approach that vendor and state, "We would have sold this machine under the
'old plan' for $100,000 out of which we would have spent $27,000 on
marketing. Since you are doing the marketing for us, we will give you the
$27,000 as a discount. You determine how much of that you can pass on to
the customer and how much you need to spend on ads etc."

This lowers the street price of the AS/400 hardware which benefits both
IBM and the software vendor. 

You are putting the cart before the horse. Your statements (above) make it
appear that IBM or the business partner should sell people AS/400s as if
some customer is going to say, "Wow! This AS/400 ad is really great! I
better run out at buy one. Now, let's see if there is any software I can
buy for it that I want." Think about it for a minute. What is the customer
really buying?

>The loss to which you refer was IBM's own fault.  They shouldn't expect
>Business Partners to make up for their own inadequacies, especially when
>treat the BP's so poorly...

This made me choke. There are a lot of good business partners that need
better support and more resources. BUT. 

I am very familiar with business partners which play the paperwork game
and fill out all the right forms to qualify as BPs or affiliates just so
they can be "outside sales agents" and sell IBM hardware while adding zero
value. These parasites are the damage to the new channel. They soak up
IBM's resources and margins that should be going to BPs that actually DO
something for their customers. 

I worked for a business partner and maybe my experience was unusual (I
don't know) but IBM was an awesome resource. They provided us with
advertising, facilities, training, and leads. All we had to bring to the
table was expertise and manpower. 


>Dean Asmussen

Chris Rehm
You have to ask yourself, "How often can I afford to be unexpectedly out of 
Get an AS/400.
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