New ASNA President Takes On Modernization Business with Services Emphasis

September 29, 2008 Dan Burger

When BluePhoenix Solutions acquired ASNA 13 months ago, it made building the services side of the business a priority. Pieces of that puzzle have been added since the merger, and the latest move has been to put a new president in place. Last week, ASNA announced Greg Schottland would be taking command of the .NET-oriented application modernization software company that has refocused its approach to helping customers with modernization projects.

Modernization projects are under way in a fair number of IBM i shops, but the traction that many people predicted in the application modernization area has not taken hold. Schottland is counting on expanded services to move stalled projects forward.

“Our customers are not in the migration or modernization business,” he says. “They have a real business to run.”

The main problem, as Schottland sees it, is that companies are log-jammed with day-to-day business priorities. He says companies realize there are issues relating to application and data integration that need to be fixed through modernization, and they also recognize the limitations of their existing systems. He’s convinced the reason most companies haven’t moved forward is “because the road forward hasn’t been clear, or the companies don’t want to spend the money, or they don’t have the extra people to get it done.”

Schottland takes over as ASNA president after serving as the vice president of North American sales since January. Since the first of the year, he has gotten to know the ASNA customer base and the System i market. But his understanding of the application modernization technology goes back much farther. Schottland was president of CodeStream, a company that specialized in migrations from mainframe IDMS databases, when it was purchased by BluePhoenix in 2006. He came to BluePhoenix as part of the deal.

“I was brought into that company [CodeStream] as president to do a turnaround, which I did and the conclusion was the acquisition by BluePhoenix,” Schottland says.

Prior to that, he founded and ran a software tools company called Advanced Software Technologies, an object-oriented software design tools provider. That company was acquired in 2000 by Embarcadero Technologies of San Francisco, a provider of database management tools.

Schottland also has worked at IBM, first as a software developer and then later in sales. He credits that time for honing both technical and business skills. “I am familiar with the issues around migration from my time working with compilers, languages, and that sort of thing, and I understand the business and the challenges of running IT and evolving technology as it matures.” The key, he says, is “fitting that in with business requirements and profitability.”

During his tenure with CodeStream and then BluePhoenix, Schottland became familiar with the mainframe market and modernization projects in that arena. The differences between projects in the mainframe and AS/400 markets are conspicuous, he says.

“There’s a difference from a technical, hardware, and software perspective, but that is probably the least important factor,” according to Schottland. “The main difference is that the mainframe has a completely different type of customer with a different business model. Most mainframe customers tend to be larger–companies in the Fortune 100, for instance. Their budgets are larger and they can afford to do more strategic investment. Plenty of these companies are modernizing as a preventative measure.” Schottland describes mainframe customers as being able to do proactive IT work before something creates pain for the organization.

“iSeries customers are much more tactically based,” Schottland says. “They are looking not so much to reduce cost, because it’s a very cost-effective platform, but because of business limitations that are imposed on it. It could be a technical limitation or a limitation that results in customers not wanting to be on the platform–particularly if it’s an ISV [independent software vendor]. Or if the customer is not an ISV, it’s because the iSeries doesn’t fit in–it’s an island–in the rest of the IT organization. It’s really a matter of whether a company can afford to be strategic or if it has to be tactical. Budgets are smaller, timeframes are shorter, and requirements are more stringent within the iSeries community.”

The difference in the two markets has a lot to do with why BluePhoenix runs ASNA as an independent operation, he says. What BluePhoenix has done for ASNA is provide additional resources. It has increased the number of experts in modern technologies that includes areas like service oriented architecture, Java, and Microsoft technologies. Schottland says his read on customers is that their needs are diverse; they are not focused one box.

BluePhoenix’s mainframe business is paying dividends to ASNA as well because System i boxes are frequently found in mainframe shops. As BluePhoenix takes on mainframe modernization projects, there are attendant System i modernizations that fall to ASNA.

“I can’t tell you how strong the crossover effect is going to be yet,” Schottland says with regard to the ASNA business coming from mainframe shops with System i boxes. “It’s been minimal so far, but it’s growing. The bulk of the business has been from the Four Hundred community coming to us. This is almost all new business–names that have not been in the family before.”

Most modernization projects that ASNA has been involved in, Schottland says, are instigated for three reasons. The first is cost savings and a desire to reduce IT spending in the long run. The second is the need to remove limitations imposed by the System i platform, which create a silo of information. The third is to address a perceived risk of being on a declining platform and a skill base that’s hard to obtain.

“This is a very solid platform,” Schottland says about the System i. “We don’t have people coming to us saying we have to get off this platform because it’s unstable and we’ve had hardware problems constantly. It’s not that way at all. The applications are performing. They have outlived any timeframe that people could have envisioned. Most legacy platforms are more stable than the more common platforms. I love the Microsoft platform, but if you talk to someone who has been managing Windows server boxes are they going to talk about the frequency of reboots and having to upload patches? Absolutely. We have to come at this for what it is. You have a very good, reliable, stable platform that has applications that have been customized over 25 years and it works like crazy for you. So that makes it more challenging. So where is the real value in modernizing? The value is in the issues that the business is facing even with all that good stuff there.”

At the same time, the strongest area of revenue growth for ASNA comes from companies that want to move off the System i platform. “Probably 15 percent of our customer base is moving off the platform each year,” Schottland says.

“I don’t think IBM has done as good a job painting a roadmap going forward [with the System i] as they have done with the zSeries,” Schottland says. “It leaves people concerned that it’s not quite as seamless. It’s not as integrated with other technologies and platforms. It’s not as easy as it is with almost any other technology. These things are being brought to our attention as concerns. Whether it is part of a trend or whether IBM can blunt it and it’s only a wrinkle in the road remains to be seen.”

The companies that ASNA deals with are a subset of the entire System i installed base and consist of those that have made a decision to modernize and eventually migrate from the platform.

“We’ve seen an acceleration of activity that has to do with integration and migration,” Schottland says. “It’s not a situation where people are staying there [in the System i environment] and developing. If you look at the Java platform, it is very stable. If you went in and talked about migrating off Java, it falls on dead ears. There’s no discussion about it. It’s a platform of today. The same is true with .NET.”

What Schottland hopes to avoid is the quagmire that results from discussions that focus on the so-called “religious” perspectives of IBM versus Microsoft or that the System i is old and therefore old is bad and you have to move. “That is not a message that has any business value,” he says.

“I can’t overstate the issue of risk,” he says. “When we come in and say if you want a modernization, this is the schedule and cost and we own it. The risk is on us. We offer them the expertise based on the fact that we have done modernization projects many times before. We don’t have the same learning curve, so we can be faster and it will be higher quality. We give a fixed price and a fixed schedule. If we are late, it’s on our dime. The customer continues to do what they need to do rather than be tied up in a modernization project.”

It’s this message and the broad range of services that ASNA is prepared to offer that will win business, says the new president.

“My goal is to serve the Four Hundred community in whatever way it wants. It’s not all about migration. There are cases where people are happy on the platform and they want to expand functionality and take advantage of the new Power platform or integrate with other platforms without moving off the platform. They have had these systems for a while. Their IT is well thought out. I want to understand where the customer is coming from. And I want to have an array of services that can support them across their needs.”

Schottland replaces Eduardo Ross, who served as ASNA president for five months, after taking over for long-time ASNA president Anne Ferguson. Ross’ new position is vice president of technology and services. He has been the key technology scientist at ASNA for almost 20 years and had the position of vice president of research and development since 1990.

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