From the Top: IBM's Andrew Baker - The road ahead

From the Top: IBM's Andrew Baker - The road ahead

Virtualisation and efficiency in IBM's race for the top spot and a better server

In the final part of an in-depth interview with ARN's BRIAN CORRIGAN, IBM's Andrew Baker talks about blade servers and the competitive landscape.

IBM has been building virtualisation into its boxes for decades now but if you asked people to name virtualisation vendors I don't think you would make many lists. Are there any plans to address that? AB: Our plan is to drive blade as a server architecture extremely hard. We believe it has a lot of potential for clients, primarily due to the consolidation opportunities with obvious green benefits as well, but you are right that we have been in the virtualisation business for near on four decades. It remains to be seen whether driving it across into today's System x technology is the smartest strategy. It's a fairly big ask, I would suggest. The strategy now is to go out very hard with blade and we are working with the channel to drive market share.

Do you see that as the biggest server opportunity today? It seems to me that the vendors are taking blade but there's a channel perception that it's still fairly high end. AB: That's a completely fair statement but our view is that blade will be the future battleground in the server business. It will begin to takeover from rack-mounted servers at some point in the future as technology continues to improve its price performance. We see blade as a key area for us to lead in and my expectation in the next couple of years is that partners will see blade as a more important technology than they might today. With any technology there is an adoption cycle. The vendors see the potential of blade as a technology and are driving it very aggressively. The adoption cycle will catch up for sure.

Will blade be a two-horse race? AB: Who's the second horse? It might look a bit like that at the moment but you never know. You could argue that IT, quite a while ago, looked like a two-horse race or even a one-horse race but we believe blade is the server technology of the future. The server market still looks healthy so it could attract players from different quarters. The market tends to consolidate and then diversify so it wouldn't surprise me if other players came in.

One frequent criticism of vendor marketing programs is that they are changed too quickly. Would you agree? AB: That's a reasonable criticism and that has been true of us in the past. We have worked very hard this year around these enablement activities and marketing is obviously one of the key areas we can get right. We get our brand, SMB and BPO marketing leaders to pick the plays and programs we think will work for the channel. Express goes back to 2002 so it is consistent and predictable although it has an evolutionary nature to it. There has been a substantial injection of funds this year. Partners should be able to rally around Express with confidence that it will be around for some time to come. Although we do tune marketing programs on a quarterly basis, that tuning is fairly subtle. For example, we have selected industries that we will be putting a particular focus on in SMB this year and those were announced to the channel in the first quarter. We will continue to drive those through the remainder of the year and the odds are we will still be working on them in 2008. SMB is a market that requires regular adaptation but I think we are getting a lot better at being consistent around key marketing plays.

We have kicked off a program called the Marketing Cafe series where we take our marketing management group to the capital cities and work through the programs we will be launching in the coming quarter with the marketing managers of our business partners. We are working to give them leverage opportunity on the back of our considerable marketing spend. That's why we have a team dedicated to working with ISVs and another focused on helping them port across.

IBM has recently been passed by HP as the biggest technology vendor in the world in pure revenue terms. Are you confident of taking back that crown and, if so, what will be key to doing so? AB: Our focus is on delivering client value. One of the reasons we let the PC company go was that we saw the provision of end-user device progressively been pushed out of the business-to-business client value space that we seek to be in. Had we retained the PC business, and the printer business we recently sold, then no doubt we would have larger revenues but so what? Revenues don't mean much to stockholders and I would argue it means less to clients or business partners.

Change is the only constant in a dynamic market like IT. How do you expect IBM's competitive landscape to change during the next few years? AB: You never know. I would expect to see some competitors fall off but we will see others enter. That landscape has changed continually ever since I have been in the market; sometimes in ways we can predict and sometimes in way that we can't. I'm certainly not going to offer any names.

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