Market dynamics and IBM vs IBM

Yet again I find myself handcuffed in terms of what I can say about my current projects, but inspired to respond to long time buddy James Governors blog or twitter posts.

In a blog entry, James takes up the cause of the underdog, in this case, Nick Hortovanyi who is working down-under to sell IBM hardware and software. Nick complains in a blog entry about trying to sell IBM Software and IBM System x servers, while IBM System x are running adverts in the press advertising Windows software and middleware.

So James, you as much as anyone knows that IBM is a big company, measured in small pieces by their own PNLs. Do you hear Power Systems VARs and Partners bleating because System x (x86 servers) advertise and promote Intel Inside and Windows ? Did you hear mainframes complaining about SWG making Windows enterprise ready?

For that matter, when was the last time you recall seeing IBM SWG extol the virtues and scalability of IBM System x Enterprise Servers? The iDataPlex is an awesome machine for running Windows and Linux web infrastrcuture, but you wouldn’t know from IBM SWG advertising. You’d be surprised who pays whom to run these adds, but the x86 marketplace is fiercly competitive and if IBM only sold IBM, we’d be out of that business before you could spell b-u-s-i-n-e-s-s i-n-t-e-l-l-i-g-e-n-c-e.

I’d be more interested and concerned about the support and incentive Nick and his peers were getting to sell IBM products, than what IBM was doing in advertising. If we fail in the former, we fail, period, no matter what advertising we run.

4 Responses to “Market dynamics and IBM vs IBM”


  1. 1 business intelligence September 27, 2008 at 6:10 am

    Thank you
    This is a cool website.

  2. 2 Nick Hortovanyi September 27, 2008 at 8:09 pm

    Mark, have never really tried to sell IBM hardware ourselves, except if it was basically a paper transaction of a substantial size. In the past we experimented with partnering with other IBM Business Partners in this area to create a composite offering where we were the lead.

    Anyway, I wrote a little blog entry.. for some strange reason I couldn’t post a track back from Apache Roller to your blog.. http://blogs.toasttechnology.com.au/roller/hortovanyi/entry/ibm_vs_ibm_in_smb

  3. 3 cathcam October 1, 2008 at 7:36 pm

    Nick, I could post this to your blog, apparently you don’t accept over 1000 characters. like Pascal, “I made this [letter] longer, because I have not had the time to make it shorter.”

    I don’t see the disconnect between what Ed is saying and my post. I was merely stating, for example, that you never know who is paying for some of the adverts you see in magazines and on the web.

    Just because a print add might be about IBM products, doesn’t mean it was paid for by IBM, or at least fully paid for. If you were creating at full page ad for your business and I offered you a 50/50 deal on the cost if you included my website URL and avatar, would you turn it down? Heck, I’m getting it on here for free ๐Ÿ˜‰

    My point about iDataplex wasn’t aimed at SMB, but at the suggestion that one division in IBM should only promote something strategic to another or to the Corporation.

    There’s no doubt about the strategic nature and investment in Lotus and Websphere at IBM. But you never see them promoting specific server platforms(well not these days) and thats the way things are. So while WebSphere and Lotus Connections run like the true champions they are on iDataplex, for one reason or another, they never get marketed that way.

    The rest of your post I can’t really disagree with. I don’t want to come across as an IBM apologist, just to make sure that at least in the case of Windows on x86 market, it’s never clear which is the dog, and which the tail.

  4. 4 Nick Hortovanyi October 2, 2008 at 3:23 am

    I love that quote from Pascal ๐Ÿ™‚

    They were IBM ads, no business partners that I could see. Does IBM do co-marketing with Microsoft?

    Hardware is a commodity product. The products that you work on would appear to be a very specialised area in optimising the performance of datacenters through increasing density and decreasing carbon costs.

    That’s why I think it’s only a matter of time before IBM offload to Lenovo, or another company, the non-datacenter X Series products. Just no money in it.

    Software still has some value, but judging by what I see, I’d give it another five years max. Then margins will be so low, that SI/Resellers will stop selling it.

    There is a world of hurt coming http://blogs.toasttechnology.com.au/roller/hortovanyi/entry/saas_those_that_get_it

    Everytime a try and financial model a classical SI business, its no longer a viable business. The only real reason I can see that they survive is recurring revenue from support (hardware/software) and the consulting work. Margins are just dropping everywhere. What have you seen?


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About & Contact

I'm Mark Cathcart, formally a Senior Distinguished Engineer, in Dells Software Group; before that Director of Systems Engineering in the Enterprise Solutions Group at Dell. Prior to that, I was IBM Distinguished Engineer and member of the IBM Academy of Technology. I'm an information technology optimist.


I was a member of the Linux Foundation Core Infrastructure Initiative Steering committee. Read more about it here.

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