IBM is combining its AS/400 and RS/6000 manufacturing and marketing to cut costs worldwide and establish a single server division, which may encompass mainframe and PC servers eventually. The organisational overhaul was initiated by Bob Stephenson, IBM's former PC chief who replaced Nick Donafrio earlier this year as head of servers. The group is to be headed by Stephenson and under him will be the newly appointed general manager of server brand marketing, William Ziegler, formerly head of AS/400 worldwide. Manufacturing will be in Rochester, Minnesota, birthplace and stronghold of the AS/400, and the combined worldwide marketing headquarters will remain in Somers, New York. The company is expected to continue marketing under both brand names. Cary Ziter, EMEA region marketing spokesman, confirmed that this was a preparatory step to merging the two divisions and cutting staff. The move follows IBM's offer of voluntary redundancy to all staff who want it. "We expect to see (headcount) reductions, but current staff numbers are confidential and we won't guess the eventual impact on human resources," said Ziter. "The divisions are coming together to reduce expenses and become more competitive." Dave Andrews, head of US-based consultancy, DH Andrews, argued that Stephenson was brought in to restructure the server group. "The server business has been struggling over the past year and Stephenson's brief is to cut costs now," he said. "(Stephenson's) mandate is not business as usual. The long term aim is to have all four server businesses consolidated into one, and it's a very positive move if he can pull it off." Keith Woods Holder, managing director of UK market forecasters, KWHR, commented: "The surprising thing is that it's taken IBM so long to do this." He added: "IBM has always had a unique problem. It has multiple solutions for one problem, but it cannot market multiple solutions without an apparent conflict of interests. This move could reduce the degree of defensiveness in the two camps. Instead of guarding their own turf, they can refocus energies on building a midrange division with multiple application and hardware choices."
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