By Timothy Prickett Morgan
The AS/400 is the first of IBM Corp’s various midrange servers to be covered by a new outsourcing service from IBM’s Global Services division called Midrange Express. IBM says that 90% of the companies in the world will eventually want to outsource some or all of their data center operations, and Global Services is fleshing out its product line with new offerings aimed at satisfying the wants and needs of that large majority. Midrange Express is targeted specifically at small and medium businesses that use IBM’s AS/400 servers. The base Midrange Express service for AS/400s includes system monitoring, help desk support, user account management and daily data backups; it costs $4,000 per month. Option services covering security auditing, disaster recovery, batch job management, performance and capacity planning and software upgrades cost from one to two grand per month extra. The complete Midrange Express package costs $12,000 per month per machine. That may sound like a lot of dough for a year’s worth of services to completely outsource the operation of an AS/400, but AS/400 talent doesn’t come cheap these days. AS/400 tech support analysts cost anywhere from $50,000 to $60,000 a year on average in the United States; even system operators cost as much as $40,000 a year in some regions. Basically, Midrange Express replaces anywhere from one to four people at the typical AS/400 shop, who can in turn be used to work on modernizing applications rather than manage the day-to-day workings of the AS/400s that run them. Midrange Express was launched in Canada and Australia last June and is now being offered to customers in the US, across Europe, in Latin America and in New Zealand. In early 1999, IBM Global services will expand the Midrange Express outsourcing service for AS/400s to include other geographies. Each AS/400 under the Midrange Express program has to be at a currently supported operating system level — that means OS/400 V3R2, V3R7, V4R1, V4R2 and V4R3 — and must be kept current during the full term of the contract. During the first half of 1999, IBM expects to deliver similar Midrange Express outsourcing services for Windows NT and Unix servers as well. IBM hasn’t set pricing for these services yet, but they will likely be on par with those for the AS/400. Unix and NT skills are in such short supply that IBM probably doesn’t have to cut price to sell the Midrange Express services; in fact, depending on market conditions, it may even be able to charge slightly more for the Unix and NT variants of Midrange Express since those environments are generally more cranky than OS/400.
