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IBM changes AS/400 channels to generate new growth

by Janice McGinn

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IBM UK announced its new AS/400 channel strategy today, and as predicted in 'VNU Newswire' last week, it is introducing a two-tier distribution model.

IBM claims that resellers will source systems and peripherals from a single distributor eventually, and when it it introduced a similar strategy in the US last year, the distributor outlets fell from 200 to only six.

Margins for Vars are believed to be around nine per cent and sources say that the new plans will see a further five per cent if Vars meet quarterly targets and additional points for participating in the IBM Centre of Excellence accreditation programme.

IBM?s Kevin Bishop, director of distribution channels for the northern Emea region, refused to confirm the numbers, saying: ?I don?t want to talk about margins but there will be levels of discounts for (Vars) investing in skills.?

Antoine Granatino, vice president of AS/400 Emea, said that the average discount is around 30 to 35 per cent off list price.

Big Blue is mirroring its Netfinity and RS/6000 distribution models, reshaping the AS/400 channels ?to animate and help grow the market", said Granatino.

?Customers say they don?t know where to buy AS/400s,? commented Tony Madden, AS/400 Emea sales manager. He added: ?It is important to reach new markets and new people. The cornerstone of our new strategy is to reach new markets, to refresh the products and routes to market.?

On products, IBM confirmed that new AS/400e servers will ship on 26 February - 21 May for the OS/400 V4R4 operating system. As reported previously, the AS/400s 170, 720, 730 and 740 use the Northstar processors and the operating system offers improved Windows client and server integration; continuous availability clustering facilities and new logical partitioning technology.

The European midrange market, including the AS/400, RS/6000 and Netfinity, is worth some $15 billion to $18 billion a year, and IBM is investing between $800 million to $1 billion in development work, according to Granatino.

He said that the RS/6000 and AS/400 boxes now share components and technologies, including processors; they are manufactured in the same plants and all research and development work comes out of the same labs. With so much in common perhaps the next logical step is more commonality in pricing?

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