Our sister paper, Unigram.X asked three leading US analysts to give their own impressions of IBM’s RS/6000 launch. Their responses follow.
Remember the B in IBM still stands for Business by Harley Hahn
With the recent announcement of the new RS/6000 family and the Xstation X-Terminal, IBM has raised the ante in the high stakes Unix card game. At every price point, IBM has offered machines designed to match their competition but with far more performance. IBM is deliberate about its positioning of the new systems. They are primarily targeting the technical market of software developers, engineers and scientists. The other big chunk of the market – multi-user business systems – is a secondary objective. Why is IBM approaching the marketplace in this manner? There are three important reasons. First, IBM expects that the business market will develop on its own, just as it did for the RT. The technical market, on the other hand, will take more of a push, especially after IBM’s problems with the RT’s image as a less than adequate workstation. Second, IBM cannot do everything at once. They have chosen, at this time, to start with the demanding technical users. And third, there is a certain amount of snobbishness within the academic and scientific community. Many of those users do not want to buy a business machine. However, don’t be misled – these systems are good workstations and servers, but they are also cost-effective multi-user commercial machines. I predict a lot of opportunity for value-added resellers and for commercial software developers. IBM will be opening over 25 centres around the world where developers can get assistance in porting their programs to the new computers. Remember, the B in IBM still stands for business. In recent months, there has been speculation about how IBM is positioning the RS/6000 with respect to other IBM systems. There have been rumours that the announcement date and the prices have been affected by internal bickering between advocates of one system or another. But from what I have seen, there have been no limitations placed on the design or marketing of the machine to protect existing IBM product lines. You may find it hard to believe, but IBM honestly feels that the RS/6000 does not directly compete with AS/400s, PS/2s or 370s, but with other Unix vendors. What has been discussed internally is the importance of the new system to IBM.
Harley Hahn, president of Harley Hahn Consultants, is currently en gaged in revising the Peter Norton books Inside The IBM PC and PS/2 and The Peter Norton DOS Guide, and is the author of the forthcoming Peter Norton Unix Book, to be published later this year by Brady Books, a subsidiary of Simon & Schuster. He is also the author of a report on the RS/6000 Series.
In recent years, earnings have been flat, and there has been a vast amount of pressure from the stock market for an increase both in revenue and profit. The RS/6000 represents one of IBM’s key strategies for the 1990s: open systems. It is aiming for the RS/6000 to boost its profitability by 1991 or 1992. By 1993, IBM plans to be the worldwide leader in the Unix market. Whether this happens remains to be seen. In my opinion, the long-term success of the new computers will depend mostly on the growth of the world economy and the effects of the 1992 economic unification. Put simply, the RS/6000s are good computers: if the economy does well, IBM will move a lot of product. So how can we characterise IBM’s sizable plunge into the world Unix market from a virtual standing start? When you’re in a high stakes card game and the other fellow holds all the aces, there’s only one thing to do: kick over the table.
IBM Loves Unix – by Amy Wohl
IBM saved its Valentine’s greetings to the computer industry for February 15th: its RS/6000 announcement. Unlike the less than popular RT, the RS/6000 is a price-performance stealer. In a market where nothing succeeds like speed, it is sure to garner lots of attention. IBM has aimed for the high-end Unix workstation and server market with dazzling performan
ce and seductive options – at competitive but high prices. These are the weak spots. If you offer price-performance by holding price and raising performance, you can be countered in the short run by those who hold performance and drop price – that will be the market shareholders’ obvious short-term strategy. Longer-term, of course, they’ll try to counter IBM’s four instructions per cycle architecture with faster schemes of their own devising, but in the short term it will be what they have in the market and on the shelf. IBM seems to think the competition won’t react – but they will!
Amy Wohl is president of the Wohl Associates consultancy in Bala Cyn wyd, Pennsylvania. She comments on the computer industry and edits The Wohl Report on End-User Computing when not giving advice to clients on marketing and technology strategy.
Marketing is likely to be a problem area too. When Sun sells, it sells Unix. No-one has to decide what to sell the customer. When an IBM sales rep calls on an account it requires pastoral counselling. What shall it be: a nice AS/400? A zippy 9370? A low-priced PS/2 network? Or something chic in Unix? IBM seems warmer now to Unix than ever before, but its big sales force is used to lots of direction and support. It will need to be told when to sell Unix and when to offer something else, and IBM seems to be struggling with the decision. Another big (giant?) issue is software. Sun, for instance, has over 1,500 Sparc applications shipping. IBM offered 150 RS/6000 software commitments on February 15. Continued on page 3
