The Best of Times for IBM to Support All Its i Customers

The AS/400 customer base needs to hear from IBM. They want to be reassured–not with words, but with deeds–that they are not being left behind. Loyal as they are, these devotees are not immune to feeling disregarded. Maybe not so much among large enterprises, where approximately 20 percent of the users provide IBM with 80 percent of its revenue, but in the SMB space where 80 percent of its customer base dwells, there is a feeling that IBM’s investments in the platform are not sufficient.

For its part, IBM can point to a reinvestment and a research and development record that’s impressive on paper, but in most cases is only reaching a portion of the overall customer base for the platform that’s officially referred to sometimes as the IBM i (if you are talking software platform) or the Power Systems i (if you are talking about the complete hardware-software package). You used to be able to just say “AS/400” and we all knew exactly what you meant. Even IBM’s jealous competitors.

One of the most important moves IBM has made that benefits its IBM i customers, is bringing hardware prices into parity with the AIX side. This resulted after the convergence of the AS/400 and RS/6000 (System i and System p) product lines into one line that’s referred to as Power Systems. The hardware was practically identical for many years prior to the convergence, but the lower pricing was only brought to the AS/400 side less than two years ago.

A nicer price was expected to drive hardware upgrades, but that hasn’t happened to any large degree despite the added lure of increased performance from a new generation of processors that put price/performance comparisons in a much better light. There were also expectations that the new Power Systems i would attract new customers to the platform now that it had a lower point of entry in terms of cost–one that compared favorably with the Intel lineup. Examples of this happening can be found–usually in this newsletter and usually not in IBM’s sales brochures and Web pages–but they fall far short of indicating any thing that resembles a trend.

When the executives at IBM talk about the expanded capabilities of the IBM i, they zero in on topics such as running multiple operating systems (AIX and Linux alongside i) and the significant number of new applications this brings to the IBM i user. Potentially, yes. In reality, it’s yet to make much impact.

The capability of mixing OS/400 (predecessor to i5/OS and i) and AIX predates Power Systems. For a number of years, the percentage of AS/400 users that have run multiple operating systems remained somewhere in the 5 percent to 10 percent range. The introduction of Power Systems and the re-emphasis of that capability hasn’t changed those percentages significantly. The reality, at least at this point, is that most AS/400 shops care little about running other operating systems on Power iron, even if they have a taste for X64 servers running Windows for lots of their workloads.

Although this multi-OS capability is often touted by IBM as being a feature IBM midrange shops have asked for, it hasn’t played out that way. The multi-platform story has been used to make the AS/400 seem less proprietary, a label that all IT vendors want to shed, but the users seem to actually wear it as somewhat of a badge.

IBM mixes the multi-platform message with the logical partitioning history of the AS/400 and the impressive return on investment to be gained from server consolidation. Server consolidation has worked out well for many AS/400 shops, but the consolidation has been in the number of AS/400 servers, with a fair number of shops using inboard X86 servers while they were available. Still, reducing the number of Unix and Windows servers through consolidation of those boxes onto an AS/400, iSeries, System i, or IBM i proper exists only in small numbers.

Last week, I spoke with Stan Staszak, director for System i products at Sirius Computer Solutions. Sirius is one of IBM’s largest business partners–and possibly the largest depending on how you split hairs. Staszak has an AS/400 background that dates to the early 1990s; he began working for IBM in the late 1980s.

Staszak says the System i customers that he works with are very familiar with IT optimization, server consolidation, virtualization, and logical partitioning.

“We started to see a lot of our customers adopt consolidated strategies two or three years ago,” he says. “A subset of our customers–probably less than 10 percent and maybe closer to 5 percent–is consolidating multiple platforms. That may not sound like much, but we have a fairly large install base. Since IBM announced the Power Systems, there hasn’t been a change in the trend of companies that are consolidating. We are seeing about the same pace of adopting. I don’t believe that common models and feature codes across the board has prompted customers to take a closer look at consolidation. They were receptive to it before.”

More than 75 percent of i customers who get their gear from Sirius are using logical partitions (LPARs), according to Staszak. That includes customers from large enterprises as well as those that are small or medium businesses. The majority, he says, are running multiple IBM i OS partitions. The secondary partitions are being used for quality assurance testing, Lotus Domino, and even Voice over IP (VoIP) telephony systems.

The VoIP application of choice at Sirius is the 3Com product. (A second choice for AS/400 shops is offered by Nortel, which is in Chapter 7 liquidation at the moment. It is reasonable to assume this VoIP solution will end up somewhere, maybe Siemens.) The 3Com VoIP, says Staszak, scales to between 100 and 2,000 handsets and fits the majority of Sirius AS/400 customers. The average VoIP implementation at Sirius is about 250 handsets. The 3Com product scales higher, by the way, so this should not be misinterpreted as a ceiling for that product. It runs on Linux in a System i partition.

VoIP is a technology that IBM i executives have singled out as very important to the future of the IBM i platform because it integrates back end systems with important business functions such as help desks and customer service. Although high expectations exist for System i and VoIP, the number of deployments are underwhelming at this time.

One of the reasons, Staszak says, is because IBM i shops are either unaware that the resources exist or they are not taking an interest in VoIP because communications are outside their typical sphere of influence. It makes sense to them, however, when it is presented in terms of consolidating file servers, the VoIP server, and other functions in a partition on the IBM i.

“VoIP is a small percentage of our overall customer base, but we have dozens of customers that are running VoIP on i,” Staszak says. “IP telephony is the way of the future. In 2008, the communications industry, in general, saw more new VoIP systems installed than new PBX systems. I know from talking to CIOs and IT directors that if they are not in the process of migrating off traditional PBX that they were planning for it or thinking about implementing it in the future.”

Dozens of customers in an installed base that is among the largest of all IBM i business partners is emblematic of why the majority of customers are wondering what is being done to simplify their situations. They have their hands full with the day-to-day IT operations.

A good example of adding complexity and constructing a road block is the latest version of the operating system. IBM calls it i 6.1, but it’s also widely referred to as V6R1, a sort of AS/400 defiance.

Only a small subset of Sirius customers–maybe 5 percent, but definitely under 10 percent, according to Staszak–have upgraded to i 6.1. It’s frustrating, he says, because a company needs to be on i 6.1 to take advantage of the blade servers, which have the promise of being an IBM i investment that could have a higher mainstream adoption rate and give the IBM i a much better shot at being adopted by new customers.

Gaining new customers have been as not been easy for the folks selling the AS/400, iSeries, System i, and Power Systems i. Ten years have slipped by since there’s been numbers to brag about. But a much better price/performance story and the evolution of the blade server has brightened the outlook somewhat.

The problem is that the jump from V5RX to i 6.1 requires program conversion, which we have been through at length here and here.

“The program conversion is scaring some of them,” Staszak admits. “It’s going to be time consuming. On the list of projects most companies have, it doesn’t get high priority. The biggest challenges now–in light of the economy–relate to layoffs, because many customers are resource strapped. Companies are looking for supplemental assistance. They need help with some of their strategic initiatives. They simply can’t devote the time to make sure all their applications are going to be compatible with V6R1. They haven’t had a chance to reach out to all their software vendors to make sure that everything is going to be observable at V6R1.”

Sirius customers, Staszak says, know they can reach some performance benefits by upgrading. There are technology advancements that IBM has made in terms of DB2 and software-based encryption.

“If this was a standard upgrade release like from V5R3 to V5R4, the upgrade for many shops would have been made a year ago,” Staszak says. “It’s not a matter of customers saying ‘No, I’m not going there.’ It’s just that they haven’t gone through the pre-testing effort to validate that they can get up to V6R1.”

Of those that have made the jump, Staszak describes it as a mix of those who did it on their own and those that have asked Sirius for assistance. In some cases, the requirements of regulatory compliance are pretty stringent. They trigger certification issues with a new release of an OS. The testing process can be a bear. One Sirius customer explained to Staszak that his company normally would take three months for the application testing folks to complete the necessary testing to certify a new release of the OS. “We just don’t have the time,” he said.

Sirius has helped customers by running the upgrade prep software–the program object conversion analyzer–and by making suggestions pertaining to specific vendors or application development source code and determining which programs are actually being used, but it’s a pre-qualifying step. The company still has to make the modifications when necessary and some will discover large numbers of applications that need attention before the move to 6.1 can be made.

“It really has to make financial sense for a customer to consider an upgrade in these times,” Staszak says. “There has to be some ROI in the decision.”

With everything that’s hitting the fan right now, the customers are frustrated, too. It would be a good time for IBM to strengthen its customer relations with the 80 percent of the AS/400 installed base that could use a friend. Some of its best efforts remain out of reach . . . or should I say, out of touch?

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