New Fast400 Reseller Is Raring to Go
August 30, 2004 Timothy Prickett Morgan
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If you thought the controversy surrounding the Fast400 green-screen governor buster would go away with the advent of the new server packaging of OS/400 with V5R2 in January 2003, and with i5/OS V5R3 in May 2004, or with the revelation of a lawsuit between IBM and Jim Stracka (the man behind Tiger Tools, which launched the Fast400 tools in late 2001), you were wrong. The controversy is set to explode again as Stracka has hired a new company to sell Fast400 in the Americas region. 
California Sales Company, in Bakersfield, California, has looked at the legal issues surrounding the sale and support of the Fast400 governor buster and has stepped into the breach to give Stracka a means of offering indigenous support in the Americas region. According to Ron Lerma, vice president of sales and marketing at CSC, there is still a large base of vintage AS/400 and iSeries machines that can make use of Fast400 to get more green-screen work done, and the updated version of Fast400 works with AS/400, iSeries, and i5 machines running OS/400 V5R1 and V5R2 and the new i5/OS V5R3. As CSC pushes sales in the Americas region, where IBM sells the majority of its big and profitable iSeries and i5 machines and upgrades, you can expect a reaction from Big Blue, which saw iSeries sales decline by 28 percent in the second quarter (that’s with favorable currency exchange rates, thanks to a weak dollar). It is hard to imagine what that reaction will be, however, considering that IBM has had three years to try to stamp out Fast400 and has not been successful. Because Lerma and his colleagues at CSC believe that Fast400 does not violate IBM’s OS/400 licensing agreements, in that it does not alter licensed internal code, they are willing to risk recriminations from IBM. And since CSC is not an official IBM business partner, IBM doesn’t have much sway over the company. Since early 2002, Fast400 has been available through Storage Solutions Group, which is based on the Isle of Man, an island on the Irish Sea between England and Ireland, and operates a Web site from the Sealand data haven off the coast of England. After its first year of business, one year ago, Storage Solutions Group had sold the tool to about 2,500 OS/400 shops, and it is unclear how many more customers it has added in the past year or how many customers have renewed their licensing contracts to continue using the tool. While Storage Solutions Group, in a cheeky move, put a mail drop about 800 yards down the road on Highway 52 North in Rochester, Minnesota, where IBM makes the iSeries and i5 servers, it has not had a presence in the American time zones, and that has complicated sales and support issues. That is why Stracka has decided to let CSC sell Fast400 in the Americas and for Storage Solutions Group to sell it around the rest of the world. There are two different versions of the Fast400 tool. One works on Power-based AS/400 machines running OS/400 V3 and V4, and the other works on Power-based AS/400, iSeries, and i5 machines running OS/400 V4 and V5. Lerma has tested Fast400 on OS/400 V5R1 and V5R2 and says that he has been told by Stracka that it works on V5R3 as well, but has not yet tested it himself. Storage Solutions Group originally sold Fast400 for $1,000 per processor per year. A year later, in 2003, it raised that price to $1,500 per processor. CSC, the new resellers in the Americas, is charging $2,000 per processor, per year, which may be a prelude to a price increase at Storage Solutions Group as well, since it seems likely that the two organizations will keep prices for Fast400 in lock step. Storage Solutions Group, like CSC, does not point customers to a Web site that bears some resemblance to its name. Storage Solutions Group sells Fast400 through www.fast400.net, and CSC sells Fast400 through www.helpondemand.net. And, like Storage Solutions Group, CSC seems to have a sense of humor, having opted IBM’s “on demand” name in its Fast400 site. CSC is a relatively unknown player in the OS/400 market, but Lerma has been in the IBM midrange market for 17 years. In 1989, he created CSC to sell used IBM midrange equipment as well as high-speed printers and high-end storage. Over the years, the company has expanded into selling software and brokering in used AS/400 and iSeries equipment. In addition to selling Fast400, which it has been quietly doing for two years, according to Lerma, CSC sells high availability software from iTera (based in the United States), security software from Bsafe Software Solutions (based in Israel), and performance monitoring software from Mid-Comp International (based in Australia). While CSC has only five of its own employees, the company, along with Bsafe and Mid-Comp, has created a sort of boot camp for training sales personnel. The camp brings in university students to act as sales interns, who are put through intensive training and offered positions in IT sales outside of their own countries. This gives CSC, Bsafe, and Mid-Comp a large pool of motivated sales people who want to travel and gain experience in IT sales. Lerma says that CSC relies heavily on telesales, and this will be one of the main ways it sells Fast400 (in addition to direct marketing, e-mail campaigns, and advertising). Given the high turnover rate of telesales staff, the three companies have created a flexible system that allows it to quickly train and staff 30 sales people, who work for 90-day stints. So how hot is the water that CSC is in, now that it is openly selling Fast400? “We’re fixing to find out,” jokes Lerma. “We thought long and hard about this before we jumped in.” Lerma says that his lawyers advised him that IBM could not seek an injunction against the sale of Fast400, because the tool does not alter OS/400’s licensed internal code, which apparently would be a violation of the licensing agreement between OS/400 customers and IBM. Lots of applications and tools interface with that licensed internal code, Lerma says, and he implies that IBM would have a pretty tough time if it wanted to make an issue over that. “IBM has not yet contacted me, but I am expecting a call,” Lerma says. Lerma says that, just because IBM rejiggered the OS/400 server packing with the standard and enterprise editions in January 2003 and again in May 2004 with the eServer i5s, that doesn’t mean Fast400 can’t be a valuable tool even on a new i5 machine with substantially lower IBM prices for 5250-related processing capacity. For instance, a customer acquiring a new i5 Model 520 Express #1 with 500 CPWs of processing capacity, which costs $11,500, could use Fast400 to hit the 1,000 CPW power of the Model 520 Express #3, which costs $29,900. Moreover, the software could extend that uniprocessor machine to its full performance of 2,400 CPWs, which is what a uniprocessor Model 520 with a 1.5 GHz Power5 core activated can deliver. That latter machine costs $43,650 in a base configuration with 2 GB of main memory and two 35 GB disks running OS/400 Standard Edition. The real question that most OS/400 shops want to know, and one which Lerma ducked because he is not a technical guy but a sales guy, is whether Fast400 can activate 5250 processing on standard edition machines that have no base 5250 processing capacity. I would be willing to bet that, if this turns out to be true, IBM will try to build a legal case, most likely based on OS/400 licensing, that allows it to get an injunction against the people behind Fast400 and Storage Solutions Group and CSC, because changing an OS/400 Standard Edition license to what is effectively an OS/400 Enterprise Edition license is legally distinct from taking the governor off of interactive workloads where customers have paid for some interactive capacity. I said legally distinct, not morally or ethically or practically different. IBM’s repackaging of OS/400 did not change the fundamental problem, that IBM wants to charge a lot for 5250 processing capacity. And it may not have changed the fact that Fast400 can activate that latent 5250 capacity in machines running the standard edition. The question now is how far Fast400 wants to push IBM. Top stories on Fast400, in chronological order “TigerTools Says It Can Remove OS/400 Governors” “IBM Issues a Statement on TigerTools’ Fast400” “Fast400 Governor-Buster Code Changes Hands” “IBM Tries to Crush Fast400 with PTF Patches” “SSG Relaunches Fast400 Governor Buster for OS/400 Servers” “IBM Fights Fast400 Governor Buster with Licensing Contracts” “FAST400 Undaunted by Revamped iSeries Line” |
