AS/400: Identity Crisis

At long last, IBM may have found a place for the AS/400. This month, the company gives new life to the computer line.

By Martin J. Garvey

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BM's AS/400 may be the most misunderstood system in the corporate enterprise. It's been beloved by customers from small shops to large data centers, but they say the company has undermarketed it for years. The AS/400 has competed with the System/390 mainframe at the high end and IBM's RS/6000 and PC servers at the low end. IBM itself eschewed the nebulous term minicomputer in favor of midrange system.

At last, however, IBM may have found a role for this machine.

On Aug. 18, IBM is giving the AS/400 a new focus, including a slightly new name. Sources briefed by IBM say the AS/400e Series is being positioned as a highly scalable, secure server for electronic commerce. IBM is integrating Netscape browser capabilities, HTTP, and CGI (Common Gateway Interface) technology, and the ability to convert legacy RPG (Report Program Generator) code to HTML. An integrated Lotus Domino server and a Java Virtual Machine and compiler will ship with the systems by early next year.

Complementing the product rollout is the most aggressive marketing campaign in the history of the AS/400. It's designed to both propel the system out from IBM's other product lines and give users confidence that IBM is serious about the platform's future. IBM also plans to step up promotion of its global support capabilities for the midrange system and market the e Series to business executives.

The e in AS/400e stands for E-Business, IBM's initiative in network computing. William Zeitler, general manager o f the AS/400 division, says IBM will rely on at least one tried-and-true marketing strategy with the new machines: bundling. "It's easier to use, you deploy applications quickly, you get results quickly, and you achieve the lowest total cost of ownership because you don't need the staff," he says.

IBM will spend $100 million, one analyst says, on ads promoting the machine's scalability, object-oriented technology, and increased security for Web-based commerce.

Users jaded by years of repositioning of the AS/400 hope IBM has it right this time. If not, "it's a scam," says Clifford Stiebeck, IS manager for National Envelope Corp. in Long Island City, N.Y.

Opportunity Knocks
Zeitler confirms IBM is stepping up AS/400 marketing efforts, but he's careful not to dismiss other IBM servers. For example, he says the new AS/400 line won't match the scalability of IBM's System/390 mainfra mes, but acknowledges the midrange models win on cost of ownership. "I don't want to discuss which of IBM's children is ugly," he says, "but we have a great opportunity with the AS/400, and we're going to drive the hell out of it."

J.E. Morgan Knitting Mills in Tamaqua, Pa., a $200 million maker of thermal underwear, already has an E-commerce application in place, running a Web page that lets consumers tap into the company's database to buy products and access pricing information, says technical services manager Kevin McKlveen. "We have concerns about security, but it's those very aspects of the AS/400 that make it attractive," he says. Morgan Mills expects the application to be running by the end of next month.

National Envelope isn't as far along in its plans, but the issues are similar. "We'll have some type of firewall, but we will allow access to the public for catalog sales," says IS director Maurice Pinsker. Adds CIO Avery Levy, "We're very concerned about security." The company hopes to have i ts new AS/400s running in six months to a year.

Jeremy Gross, chief technology officer at Countrywide Home Loans Inc., a multibillion-dollar mortgage company in Calabasas, Calif., says he doesn't have a time frame for his company's Net projects, but using the AS/400 conforms to his strategy of keeping data in one place. "Our view is to minimize the movement of data from one place to another," Gross says. "If the data is on the AS/400, I'm going to leverage Domino and Java on the AS/400."

Analysts briefed by IBM say the Apache PowerPC chip will underpin the AS/400e, which will scale to 12 processors and ship in volume by the beginning of 1998. Next month, IBM will ship in volume eight-way AS/400e systems that are three times more powerful than a current four-processor AS/400 Model 530.

At the low end of the line are models using the industry-standard PCI peripheral bus. As soon as drivers are written for the new bus, any PCI device will attach directly to the low-end 400e.

New Packaging And Programs
IBM is also clarifying its existing AS/400 line. The systems will support unstructured data types via APIs to DB2/400-the system's relational database-by later in 1998. New packaging and programs will make it easier and cheaper for customers to migrate from character-based legacy AS/400s and applications to preconfigured AS/400e systems running SAP's R/3, J.D. Edwards' World Solutions, or System Software Associates' client-server applications. IBM will also announce availability of Windows NT running on a PC Card that plugs into the system.

Analysts are most impressed with the AS/400e line's scalability. "After Aug. 18, IBM will have broken the scalability barrier," says John Logan, president of Aberdeen Group in Boston. "When it has the power of a Unix machine, the AS/400 is on the forefront for IBM salespeople and partners to offer it for E-commerce."

Another analyst says IBM will score at both the high and low ends. "They will have a dramatic effect on all computing situations a s they kick some dust up with 12 processors," says Mark Raphael, a server analyst at Meta Group in Stamford, Conn. Raphael says that at the low end of the line, the price point of $100 per TPM (transactions per minute) places the AS/400e ahead of Unix systems and just behind a four-way Compaq Windows NT solution.

The first AS/400e systems will use 180-MHz and 250-MHz Apache PowerPC chips. By 1999, the processor speeds will reach 500 MHz. "When IBM comes out with the Apache-based systems, they've eliminated the scalability issues that have hung over their heads for years," says Tom Bittman, a senior analyst with Gartner Group Inc. in Stamford.

Customers are also bullish on the scalability improvements. At Countrywide Home Loans, Morgan Mills, and National Envelope, growing the enterprise is a constant concern. "Any business going through dynamic growth would be enticed by the kind of scalability IBM is talking about," says Countrywide's Gross. "We're growing at a meteoric rate, but we don't have to l ook at another system."

At Morgan Mills, it's important to keep all applications on one system. "The more power and flexibility and less complexity we deal with, the happier we are," says Bill Sedlis, applications development manager. Sedlis isn't the only manager at Morgan Mills who's looking forward to IBM's enhanced support of the AS/400e Series. "It lets us spend less time managing systems and more time managing the business," says IS director McKlveen. "We're not AS/ 400 bigots. We just try to be smart with what we do."