The efforts are paying off, to an extent. IBM said last week it had won seven new data center accounts for the AS/400, including Data Processing Services in Indianapolis, Prominic.Net in Savoy, Ill., and Sungard Computer Services in Wayne, N.J. "There's no question the AS/400 is sufficiently scalable for this type of environment," says Sungard VP Jeff Wagner. But, he adds, "it's up to the independent software developers to ASP-ize their software" if the AS/400 is to achieve a stronger presence in hosted data centers.

IBM says it's helping them do just that. "If an independent software vendor wants to know how its software will scale in an ASP environment, we will run the benchmarks for them," says Tim Schuetz, IBM's AS/400 ASP marketing executive. Schuetz says small and midsize businesses--which represent the bulk of the AS/400 market--will move en masse to outsourced IT environments in the coming years, and AS/400 software vendors will have to move with them. "Our independent software vendors need to have either an ASP strategy, a strategy to compete with ASPs, or a resumé," Schuetz says.

Some software developers welcome IBM's efforts. "In an ASP environment, the customer just wants security and reliability. The AS/400 provides that," says Rick Bernard, CIO of Infinium Software Inc., an AS/400 software company in Hyannis, Mass.

Still, questions remain about IBM's ability to make the AS/400 competitive in this market. Many companies looking to use hosted data centers are turning to those running open systems or to dot.com specialists such as Sun Microsystems. "We have not seen any hue and cry for the AS/400, and that's why we don't offer it as a platform," says a spokesman for Intel's Online Services group, which offers its data center customers a choice between Intel servers and Sun UltraSparc servers.

Additionally, in IBM's most recent fourth quarter, pretax profit from server sales slumped 73%. That's one indication, says Technology Business Research analyst Bill Lesieur, that "it's all very up in the air what IBM is going to do with hardware, and no one is going to want to commit to a platform that might be de-emphasized at some point."