guest commentary: Taking Stock

The New Year is an ideal time to take stock of the past 12 months, celebrate successes and render resolutions.

In that spirit, I want to thank all of you for having helped make 1998 a banner anniversary year for the AS/400. We enjoyed double-digit growth, and caught the eye of businesses that may have long discounted us as old and needlessly proprietary.

I like to think we have finally blended the best of our heritage, with the best of what's exciting and essential today. Illustrating this point nicely was the way we made Windows NT enablement available on AS/400 systems this past February. We added value by incorporating features that have made AS/400 famous, such as easy management. And who would have thought the AS/400 would sport a Java Virtual Machine? Well, our developers clearly did.

Particularly in the past year, it's become "hip to be square," at least in the world of computing, where e-mail and e-business have suddenly become mission critical. Maybe "square" doesn't do justice to AS/400, but if square means the things you and your customers value -- reliability, scalability, cost effectiveness and security -- then we're duller than dirt. And if hip means putting up with server downtime and cobbling together disparate piece-parts, I'll stick with "square." (We do Java, Internet and business intelligence with panache and aplomb -- does that qualify as hip?)

I believe that in this past year, corporate America became exasperated with being guinea pigs -- testing unstable code, or struggling to breathe life into brochure-ware and the imaginative musings of the marketing department.

Not that marketing isn't important -- quite the contrary, as long as it's telling the truth. AS/400 has embarked on an ambitious and widespread advertising effort to tell the world what many of you already know (but may not want your competitors to learn): The AS/400 is a dramatically different solution than it was just a few years ago. We're pleased that the message is earning us new fans.

Those fans include small businesses to large corporations. The new Model 170 lets growing business start simple and grow fast, making it a terrific value. But it is still hard to get used to the idea of a sub-$10,000 AS/400, isn't it? We have a sneaking suspicion, though, that people will get over that in a hurry. On the high end, we've made high availability and clustering enhancements that have taken us into some very demanding environments. There's even a new 12-way machine just itching to be your data warehouse application server.

Speaking of scalability, did you know that AS/400 can support over 27,000 active Lotus Domino mail users on a single server -- outscaling the nearest competitor, Sun Microsystems, by 400 percent?

We're also earning scores of new friends on the software side. We've attracted the notice of business intelligence software vendors, like Arbor and many others. SAP, Baan and PeopleSoft have taken notice of our growing customer base and our unique value proposition. Consequently, they offer the same ERP applications on AS/400 as they do for other platforms.

Maybe it's because, as the Meta Group confirms, we slice ERP deployment times by half. Or that R/3 on AS/400 in retail environments can handle up to 1,345,000 POS (point of sale) data line items per hour. Bottom line: While hardware solutions clearly do matter, we know that software most often drives hardware purchases. So our portfolio of applications -- already the biggest in the business -- keeps expanding.

As applications have become more intuitive and versatile with the help of Java, or enabled for the Internet, many of our customers have begun this year to either replace older PCs and dumb terminals with IBM Network Stations. These virus-averse thin clients preserve the low maintenance, low cost and easy application deployment that made terminals a favorite of AS/400 users, while adding the functionality of a PC.

Zona Research predicts there will be 13 million of these devices within five years. Get busy.

This past year, it became more apparent than ever that there is no longer a "typical" AS/400 user. Many shops, for example, are waking up to the fact that the AS/400 is making business on the Web as easy as processing transactions. New tools introduced in 1998, such as IBM Net.Commerce for AS/400, which administers every aspect of secure Internet-based business, are earning widespread interest. Although you already knew that the AS/400 is a security leader, our new firewall features will let you sleep that much better at night.

Go ahead, build that intranet, get used to the dynamics of the Web, and then venture forth. Or connect supplier and distributor with an extranet. We'll help you set it up.

Okay, its time to gaze into my crystal ball, although I'm notoriously bad at predictions (I don't even know what's on TV tonight). I am confident about a few things, though. On a general level, we're going to continue to thrive.

That may seem obvious to many of you, but there's a cadre of otherwise-credible consultants who get carried away with the platform du jour. They did it with VAX, Unix and NT, and are likely to keep making the same mistake. Take a look back at the grandiose predictions about operating system X or server Y. You'll find that most of them hedge by saying that these challengers will only pull even with the AS/400 in the far future, but they make it seem as it were already a fait accompli.

Vendors have a vested interest in sidestepping questions about scalability, reliability and performance by referring to future upgrades of their OS. Well, saying it doesn't necessarily make it so.

Just know that the AS/400 was designed from the start to be ultra reliable, secure and scaleable. Other platforms like Windows NT and Unix have their origins in the consumer and scientific/technical marketplaces, respectively, making their heritage sometimes painfully obvious. Our ingenious developers designed the AS/400 in such a way that snazzy features, like Java and 64-bit computing, can be easily incorporated -- not just crudely retrofitted.

Take 64-bit computing. We are the only ones that not only gave you the speed of a 64-bit operating system and processors, but also let you automatically convert many of our thousands of applications to take advantage of the faster hardware and OS. Our next upgrade should be just as easy. Some vendors still can't provide 64-bit processors, let alone software that exploits that speed.

Okay, I'll get off my soapbox. In terms of the coming year, our forthcoming products will reflect an awareness in the business world of server consolidation, from both a performance and a management perspective.

And we've always simplified complexity, so look for us to continue allowing our customers to run their businesses, not their servers. Finally, we'll continue our drive to combine our value proposition with the latest technology, whether it's Java, the Internet, business intelligence or anything else that gives you a competitive advantage.

Have a successful 1999.