IBM’s new AS/400e model – 170 Apache Invader servers – offer the best price/performance of any AS/400 that IBM has shipped for client/server computing. The Invaders, ironically enough, offer very good value for the dollar on traditional AS/400 5250 green screen applications — what IBM calls interactive workloads, which are the kinds of applications that most AS/400 shops still run even after five years of the client/server revolution. But the Apache Invaders fall far short of IBM’s original plan, which it discussed with its major business partners back in August. To understand what IBM is doing to the AS/400 line takes a little history review. In 1993, as client/server was becoming a household word, IBM announced a line of specialized AS/400s that it said would be better than traditional AS/400s at running complex database queries from PC clients, performing batch database updates, compiling programs and handling print and file serving. The marketeers at IBM eventually dubbed these machines Advanced Servers, and IBM has now, with the Invaders, shipped five distinct server lines. Regular AS/400s – again, the kinds that most of IBM’s 175,000 AS/400 customers buy to run their production applications – were recast as Advanced Systems.
By Timothy Prickett Morgan
Customers who had 5250 interactive applications written in RPG or Cobol, which may be feeding CRT screens or PCs running terminal emulation software, had to buy an Advanced System or rewrite their applications using client/server computing tools so they used ODBC or other SQL query methods (not the 5250 protocol) to tickle DB2/400’s databases. The reason they might want to do this arduous task is that Advanced Systems cost two to four times more than Advanced Servers with the exact same processor. IBM spent years dancing around why the Advanced Servers are different from the Advanced Systems. But the truth is quite simple: IBM cripples OS/400 on the hardware with the lower cost – the servers – and charges a lot more for machines that can take full advantage of OS/400 in either green screen or client/server mode – the systems. IBM may be able to get some marketing mileage out of the fact that it now bundles OS/400 for free with AS/400e systems and servers, but customers paying upwards of $1m for an AS/400e system can tell you first hand just how free OS/400 isn’t. IBM is quite literally discriminating against its most loyal customers to pay for the price cuts that it offers to new customers who buy Advanced Servers and client/server applications. Back in August, for the first time in five years, it looked like IBM was ready give the AS/400 base a break. IBM executives in Rochester were promising an Apache server for the low-end that would blow the top off the box. Many business partners and customers looked forward to this, but now the only tops that may be blowing are those of IBM’s angry AS/400 partners and users. IBM’s Invader plan was to make them roughly twice as good at supporting old AS/400 applications as current S10, S20 and S30 servers that use exactly the same processor, memory and disk technology. It also planned to make them just as good at client/server jobs as these machines and to make them somewhat less expensive. This was a move in the right direction, to make it less costly for traditional AS/400 users to start moving into client/server and, now, e-commerce and groupware computing. That IBM abruptly changed its mind about how best to counterattack Windows NT at the low end of the midrange market is disconcerting enough. But the model 170 Invaders turn out to be worse at supporting 5250 interactive applications than the machines they replace, making them unsuitable for customers with more than a few dozen end users working from green screen applications. What is even more disturbing is the fact that with each new announcement, IBM is making the AS/400 product line more complex and less understandable to the midrange base, which isn’t best known for its computer sophistication. But, nonetheless, the AS/400 base smells something fishy in all this, and IBM can expect a backlash soon. With the advent of the Invaders, there are five different kinds of AS/400s, all of which have very different operating characteristics – again, thanks entirely to IBM Rochester’s Golden Screwdriver approach to filling out the line. There are, of course, Advanced Systems, which can support green screen applications and client/server workloads as well as any of the Advanced Servers. The Advanced Servers are the second kind. Then there’s the mixed mode AS/400e servers, which are aimed at customers wwith a mix of 5250 and client/server applications. The fourth kind of AS/400 is the AS/400e model 150 Advanced Entry. This is IBM’s low-cost Compaq killer, which is very popular, offers good value, but only modest performance. There is only one processor upgrade for it; if users grow beyond that, they have to dump the machine and buy a new one. Perhaps they’ll get a model 170 Invader, but these machines cannot be upgraded to more powerful Advanced Servers that have two to twelve Apache processors. The price customers pay for better price/performance is restricted upgrade paths. What is really troubling about IBM’s marketing plan is what it suggests about Big Blue’s understanding of the processing requirements of the small business customers. These customers may be small, but they already buy big PC servers. Customers can get a heck of a lot more PC server power for $25,000 to $120,000, which is what it costs to acquire an Apache.
Lovely vacation
An AS/400e system equipped to support the same number of client/server users as that Apache Invader and more 5250-type users could run to $500,000. For the price of a top-end Invader server, they can, in fact, get a half dozen four-way Compaq NT servers for the same money. For the price of the AS/400e system, they can get the same amount of computing power and hire a half dozen Year 2000 programmers or send the MIS staff on a lovely vacation to the south of France. In any event, those Compaq servers can, in many cases, run the same ERP applications as those available from the popular AS/400 software houses, too, so it gets tougher and tougher to make the AS/400 case to the new midrange system buyer. IBM’s best argument to date, which it levelled at the consultant community as part of the AS/400e launch in August, was that business partners who sell AS/400s will be able to make more money because AS/400 prices are higher than PC server prices. Don’t laugh, because this is exactly the kind of tactic that could work. But it leaves AS/400 business partners, rather than IBM, stuck with the job of justifying to new and existing customers why they should pay more for an AS/400e. á
