In July, IBM announced that the System i Division was dividing into the Power Systems unit (for large enterprise customers) and Business Systems unit (for SMBs). This announcement has struck dread in the hearts of some loyal i-pundits who reprised their prophetic roles foretelling the end of days—or in this case, the end of the System i franchise and a mass exodus of customers off the platform—once again.

In this analyst's humble opinion, the System i split makes good sense and, if executed properly by IBM, is likely to drive greater revenue for the company and finally demonstrate that IBM does understand its customers—or at least its System i customers.

We've Come a Long Way, Baby

Let's face it: Gone are the days of the cult-like fanaticism of AS/400 groupies. (But I'll also admit that I was, and still am, a System i loyalist, and I have my "400 > 390" button to prove it.) However—and this is a big however—many tech types (read that to mean nerds, dorks, and other pocket-protector-wearing individuals) have been replaced at conferences such as COMMON by line-of-business (LOB) people trying to understand what i can do for them.

I recall having a discussion a few years ago with a former System i executive (who has, I believe, left IBM) during which said executive told me point blank that the needs of System i customers, both large enterprise (LE) customers and SMBs, were the same. Jeez Louise! I was downright flabbergasted and annoyed. "Has anyone been listening—to me?" I thought. I was not, however, at a loss for words. I proceeded to enumerate the ways in which the respective needs of the LEs and the SMBs were very different. Shall I count the ways? Basically, it boils down to what IBM VP and Business Line Executive, IBM POWER Systems, Mark Shearer, told MC Press during a recent discussion, which was captured in the August 6 article, "Exclusive Interview with Mark Shearer: The Once and Future System i."

Essentially, SMBs are seeking solutions to business problems. They want small IT staffs and turnkey systems, they want to manage their businesses (efficiently and effectively) instead of their computer systems, and they want realistic, realizable business solutions from vendors who understand (get it? understand) their business. They don't want the proverbial casts of thousands showing up, reps who have myopic one-to-one correlations of perspective to platform/technology (i.e., the Linux rep, the Windows rep, the SMB rep, the WebSphere rep, etc.), with no ability to understand the big picture and who oftentimes end up arguing amongst themselves in front of the client. This really happens—really, really.

LEs want extreme—high availability, virtualization, and integration of multiple operating systems environments. They are multi-platform, multi-technology, sometimes even multi-national; they have very technical requirements; and they are pushing the edge of the proverbial envelope when it comes to their choice of hardware and software technologies. They also have name and brand recognition, while many SMBs do not. While everyone recognizes General Electric, many would be hard-pressed to name an SMB manufacturer in the appliance and lighting industry. SMBs align and identify with their industry vertical.

Bottom line: Duh! The business and technical needs of SMBs and LEs are different.

Back to the Future

The AS/400 or Application System 400, with the emphasis on "application," was introduced in 1988 as the successor to the Sytem/36 and System/38. Customers in this install base were usually SMB or lower-end, or divisions of, LEs. In those days, there were IBM Systems Engineers, who provided the value add of understanding the customer and its business—model, problems, and all. IBM appears to be headed "back to the future" with its new approach to sales coverage for SMBs. That is, according to Shearer, "We are empowering systems sellers for the SMB market to cover specific clients to sell the entire IBM portfolio. This is because our clients in this segment have been asking us to be more consultative, more proactive in solving their business problems with any combination of IBM systems. And this makes perfect sense. It's one of the most significant parts of the announcements, though not many people have focused upon it yet. It's about presenting a more unified IBM point of view in front of the clients we serve."

Solomon or Darwin?

In a recent article, my esteemed colleague Thomas M. Stockwell indicated that some analysts had applied the analogy of the Bible's King Solomon's resolution to two women's claims to one baby to the System i schism: Divide the child and each gets half, which of course results in a nonviable baby.

Mitosis is another form of division and is described as "the usual method of cell division, characterized typically by the resolving of the chromatin of the nucleus into a threadlike form, which condenses into chromosomes, each of which separates longitudinally into two parts, one part of each chromosome being retained in each of two new cells resulting from the original cell." (I did tell you that you'd get a well-rounded education from reading this column, right?)

Division, whether of a human cell (in the mitotic manner) or of an IBM franchise, can lead to two new, viable, and better-adapted organisms. Humans continue to evolve, and so must the System i—if it is to remain viable. And customers should not judge this announcement on face value, but rather on the short- and long-term results.

Kudos to Mark Shearer and IBM for this landmark announcement. Now IBM must morph theory into praxis by executing on this plan—by orchestrating all the various System i components, other IBM divisions, and the ISVs and the IBM Business Partners—to create two new viable units. In the immortal words of Shakespeare's character Miranda in The Tempest, "Oh brave new world..."

Maria A. DeGiglio is President of, and Principal Analyst for, Maria A. DeGiglio & Associates, an advisory firm that provides clients with accurate and actionable information on business and technology initiatives. You can reach Ms. DeGiglio at This email address is being protected from spambots. You need JavaScript enabled to view it..

Maria DeGiglio is president and principal analyst of Maria A. DeGiglio & Associates. Current clients of Maria A. DeGiglio & Associates include the Visiting Nurse Service of New York ; Experture, LLC; and MC Press. Ms. DeGiglio has more than 20 years of experience as an IT consultant, industry analyst, and executive. From 1997 to 2005, she worked for Andrews Consulting Group and the Robert Frances Group.

 

Ms. DeGiglio received her Masters Degree in Health Advocacy from Sarah Lawrence College and graduated Cum Laude from Cornell University with a Bachelor of Arts Degree.

 

 

Ms. DeGiglio has worked with IT and C-level executives to enable IT alignment with business goals and to implement best practices. She has experience and expertise in both large enterprises and in small- and medium-sized business. Ms. DeGiglio has authored over one hundred articles, reports, and white papers.

 

 

Since 2004, she has worked in the healthcare industry and in health IT investigating the legal, ethical, and regulatory aspects of creating, implementing, and exchanging electronic health records (EHRs). Ms. DeGiglio is an expert in security, privacy, and HIPAA regulatory compliance.

 

 

Ms. DeGiglio may be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..

 

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