The Quiet System

As tech vendors target the mid-market, IBM's nearly 20-year-old System i may be a textbook example of what manufacturers really want.

Posted on Apr 13, 2007

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Between April 29 and May 3, 2007, members of the IBM user group COMMON will gather in Anaheim, CA, for their annual meeting. COMMON, of course, focuses on the IBM System i platform, originally known as the AS/400 and later the iSeries, and its meetings are devoted to helping companies find ways to improve the use of the system famed for its reliability, ease of use, and completeness.

Interestingly, the meeting this year comes as many technology providers are intensifying their efforts in the so-called mid-market, that vast swath of manufacturing companies with revenue below $1 billion and somewhere north of $100 million, depending on whose definition of the market you choose. The System i has long had a home in this market segment.

Software providers, such as Glovia, HarrisData, Oracle Corp., and SAP, believe that mid-market companies simply don't have the resources for complicated systems that require a lot of human intervention, and, hence, systems that are highly packaged, easy to use, offer low cost of ownership, and don't fail are the most desirable. They are correct in this belief, and this set of requirements is now rising to the top of must-have lists, even among large manufacturers. Tech providers are trying to figure out how best to address the mid-market. Some, like Glovia, are attempting new business models, such as software-as-a-service.

These efforts may offer mid-market manufacturers new options, but as the members of COMMON no doubt will say, the System i, introduced in 1988, has already established a successful model in meeting the needs of mid-size manufacturers. As COMMON President Randy Dufault puts it: "It tends to be the quiet system, the Maytag." Even so, new-customer growth has been slow over the past few years, although current market activity may change that dynamic.

On just about all fronts, System i is getting a new lease on life. A next-generation microprocessor, the POWER6, which will undoubtedly improve price/performance once again, is on the horizon, Dufault says. Late last year, IBM and 3Com Corp. began deploying the System i IP Telephony product, a new offering that combines Internet protocol telephony capability with the System i. This will enable manufacturers to run their telephony and computing in one system. "That's pretty exciting," Dufault says.

Also, HarrisData, an applications provider, and IBM last year announced a fixed-price, five-year hardware and software maintenance package for System i hardware and i5/OS, the flagship operating system for the System i. The agreement is available to companies that purchase HarrisData's Omni License software.

And that's not all, folks. In January, IBM launched a Vertical Industry Program to add more independent software vendor support for the system, and Oracle introduced the first major new release of the JD Edwards World product in 10 years. In March, Information Builders Inc. announced a worldwide OEM agreement with IBM to embed its WebFOCUS business intelligence software into every System i computer.

Mid-market manufacturers in search of new systems, and tech vendors eager to provide them, would do well to look deeply at the example of the System i. Much can be learned from the way this 20-year-old system has been packaged and evolved. The past, as they say, may be prologue.

What's your view of an ideal system for mid-market manufacturers? Write to me at Dbrousell@thomaspublishing.com.

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