IBM to push AS/400 into ASP arena

Not unlike the legendary Beach Boys and Huey Lewis and the News, who are entertaining IBM's 4000 independent software vendors, resellers and distributors here this week, IBM is ready to continue rocking and rolling with its venerable AS/400 server in the fast-growing application service provider (ASP) market.

Next week, IBM is expected to announce a program to entice many of its 8,000 independent software vendors to make their applications ASP-capable and induce its extensive reseller network to sell new customers on the advantages of running their software remotely on ASP sites.

Compared with Unix and Windows NT, the AS/400 doesn't hold a measurable share of the ASP market and will have an uphill battle to gain acceptance, said analysts - but that could change because of strong customer loyalty.

Indeed, "[90 per cent] to 95 per cent of AS/400 customers would rather give up their first-born child than give it up," said Laurie McCabe, an analyst at Boston-based Summit Strategies.

As new applications become available through ASPs, users would likely adopt them to save time and resources in developing, deploying and managing new software.

Because of the dominant role of Unix and NT in the service provider market, though, McCabe said IBM "has their work cut out for them."

But Drew Flaada, IBM's director of AS/400 product marketing, said, "The AS/400 has an improper reputation as a green-screen system. But that's just not the case."

And Richard Bernard, CIO at Infinium Software, said he thinks the AS/400 is the ideal platform for ASPs. He's overseeing two data centres, one at Infinium headquarters and one in Boston, that will host Infinium's portfolio of AS/400 applications. "This is a huge market opportunity for us."

According to Bernard, the AS/400 offers the oft-touted features of scalability, manageability and performance of other platforms. But it adds something more. "Have you ever heard of a virus on an AS/400? Doesn't happen," he said.

In a highly competitive ASP market, where security is a constant issue, this could become a significant difference for customers.

Judith Hurwitz, CEO of market analyst Hurwitz Group, said she doubted the wisdom of software vendors becoming ASPs. "If they are going to be at all successful, that model has to change."

But few service providers offer AS/400 platforms today (only eight, according to IBM). Maria Burud, a senior vice president at Infinium, said the lack of options forced the company to invest in its own data centres. "If we don't do it, customers will go somewhere else."

IBM's planned announcement for next week is said to include financing incentives, technical support and marketing programs designed to attract service providers to the platform, as well as increase the number of ASP-ready AS/400 applications.

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