IBM is mounting an attack on two fronts to win a greater share of business in the small- to medium-sized business and SOHO markets.
The first thrust sees IBM drawing on its financial clout to offer leasing deals through resellers for rates as low as 2 per cent per year over a three-year term when the equipment is returned. Leasing will be handled by IBM Australia Credit.
The second thrust is aimed at SOHO and single system buyers. It involves a deal between Harvey Norman and IBM that sees the major retailer taking delivery of 4,000 specially configured PCs that it will retail in a $1,999 package.
For less than that magic $2,000 mark, buyers will get a 100MHz Pentium-based machine with 16Mb of RAM, 850Mb drive, six-speed CD-ROM drive, sound card, 14in monitor, Lexmark colour ink jet printer, Lotus SmartSuite for Windows 95 and a one year on-site IBM warranty. For a system with a 1.2Gb hard drive, Harvey Norman will add $200 to the price.
Biggest retail PC deal
The Harvey Norman deal is the biggest ever done by the retailer for PCs. Tony Gattari, HN's group computer controller says the move is aimed at kick-starting the total PC market and pushing HN into the SOHO market with a branded product. "The market has been sluggish," Gattari said. "This move gives the first-time buyer the complete package with a branded system for less than $2,000."
Bronwyn Guthrie, general manager, IBM PC Company, says IBM has generally been seen as an expensive supplier in the SME and SOHO markets. "With this Harvey Norman offer, if the market still thinks IBM is expensive, I don't know what else I can do," she said.
As for its moves with other resellers, IBM is aiming to work with the channel on offering a complete solution at a single per month price for the end-user, Guthrie said.
"That could involve non-IBM equipment such as hubs, routers and modems," said Greg Cassano, manager of the FleetLease unit for IBM Australia Credit. "The important point is that the end-user organisation gets the complete system for a single price." Key to the success of the move will be the reseller's ability to specify exactly what the user wants and configure the system accordingly, he said.
The target market for IBM and its resellers are the estimated 800,000 organisations that are classified as small to medium - with less than 100 employees each.
Jeremy Pollard, a marketing manager with IBM PC Company, said the aim was for a user to walk into a reseller, "Tell them he needs five PCs, word processing, spreadsheet, remote backup and remote help desk for a single monthly fee."
Sounding a note of caution in the move on the SME market, Pollard says IBM has only tested this new marketing model for a brief period in Singapore.
"We're not doing anything like this anywhere else," he said. "There's bound to be a few slip ups, but we're convinced the total package will give users what we call SCOOBE - superior customer out-of-box experience. The cooperation of our resellers will be crucial to the success of the scheme."