• Subject: Re: IBM Spin Doctors on AS/400 Marketing
  • From: mcrump@xxxxxxxxxxxxxx
  • Date: Mon, 27 Oct 1997 12:04:47 -0500

>>Some did.  Some of us didn't.  I for one was happy to see some
>>monies spent in this area.  Problem with that is I think it was very

>I agree, I think the marketing of a hardware platform is generally
>inneffective.  Same as with an OS. All you can hope for is to build
>name recognition and hope it will mean something if your products
>make it into a bid.

I definitely agree that the applications are generally the true driver
behind computer decisions.  But, not all HDW and OS's are the
same - they should have some impact on the decision and they do.
This is where brand name recognition can have an affect.  We live
in an environment where that recognition has driven computer buying
decisions.  How many people replaced existing systems because Unix
was the answer.  How many people are thinking of replacing systems
with NT?  We are replacing a completely good Netware system with
NT because that is the future?  This is a file and print server and
nothing else.  Maybe we are atypical but I don't think we are - I've
seen to many studies showing how many people are replacing Netware
with NT.  Some of those are based on practical business decisions,
some aren't.  Where is this perception coming from?

Now, if you can't tell I am generally very skeptical of the market's (any
market) ability to make true rational decisions.  I believe the economy
is largely affected by our buying moods.  I believe the stock markets
are driven largely by emotion.  I believe this to be true of the 'computer
market'.  I truly don't think our decision process is nearly as rational as
we like to think it is.  By our I mean everybody - the CEO, the CFO,
the MIS manager, the programmer, etc.  Most people probably won't
agree with that but that's ok - I'm use to it.

>>Kind of an unfair generalization, isn't it?  The AS/400 makes IBM a
>>bundle of money if memory serves correctly.  I have three new
>>emodels being installed in November myself.

>I didn't mean to imply that all 400 customers were as such. I was
>simply pointing out that IBM (as a profit making company) might find
>it more attractive to cater to NT buyers willing to spend cash than
>to CISC box owners who want upgrades implemented so they don't
> have to spend cash.  This is not an adjudication, merely and
>observation. IBM and it's motivations will not change simply because
>I perceive this as good or bad.

Sorry, got I got a little defensive.

My problem with this is that it depends on how you look at the situation.
To compare existing CISC owners to new NT buyers is possibly impractical.
The AS/400 generates a lot of revenue from existing customers - true.
Most NT buyers are looking at new systems and applications.  I think
there are a lot of times the AS/400 could play in that decision and it
isn't even considered.  Hence, the desire to 'market' the system.

>But is advertising the AS/400 advertising IBM?

I don't know why it wouldn't be.  IBM makes the AS/400 right?

>In a lot of ways, >advertising the AS/400 is a waste of money.
>Name/brand recognition_is_important. The lack of articles and
>lack of recognition certainly does cost sales and is of course
>important. The real issue, though, is whether or not a few glossy
>ads with pics of shiney new 400s is going to do the trick.

Agreed.  I don't think it will.

>Instead, IBM needs to be a part of the buying cycle earlier in the game.
>IBM needs to be viewed as a solutions vendor. When Joe Customer
>wants his new corporate solution, he needs to think IBM is a possible


>Joe Customer, at this point, wouldn't give a rat's keester for a
>hardware ad at this point, because hardware doesn't solve anything.
>He wants to see the software solution.

Hardware doesn't solve the problem but isn't it where most of these
decisions start?  I really believe the HDW and OS influence the
decision at step #1.

> IBM would love for this customer to buy an AS/400 based product
>because that means IBM will sell the hardware now and in the future.
>But what if there is NO AS/400 solution? Or none that the customer
>wants? Should IBM send the guy packing orsell them an NT product
>with IBM hardware?

I would never recommend forcing a bad fit....if the AS/400 can't do it
or does it badly it should not be used.  This is not about forcing the
down everyone's throat.

>Tell me from a stockholder point of view.

Again, this is not about forcing AS/400's out there.  It has to make
sense for IBM.  I believe that the AS/400 makes good financial sense for
(not perfect), I believe NT makes good financial sense for IBM (not
I don't think it is the silver bullet everyone thinks it is.  As a
I'm not real comfortable with my companies financial success depending
more and more on another company despite it's near monopolistic grip on
the market.   I don't have a crystal ball (but I would consider buying one
if I
could find it) but I am really wondering if, despite the hype aournd NT,
Microsoft is losing it's ability to force and control the market.

I don't think NT is quite the rising star everyone think's it is.  It has a
I just think that the hype far exceeds it's functionality.  If this is the
case -
what is the financial impact to companies like IBM, DEC, and HP that seem
to be gambling more and more on this?  As a stockholder, I am worrying a
little.  As a computer professional, I find it positively annoying and

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