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IBM revamps server line
October 3, 2000: 4:14 p.m. ET

New branding campaign envelops entire line of e-business systems
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - IBM has renamed its entire line of computers aimed at Internet-based businesses and rolled out the first new system to be marketed under the "eServer" brand.

Under the new branding campaign, IBM is including each of its four separate server lines under the eServer name, doing away with their previous designations, which were confusing to some customers.

"IBM is stepping out in an unusual way to say, 'No matter what size server you need, we've got it, and not confuse people.'" said Sam Albert president of Sam Albert Associates, an information technology consulting firm in Scarsdale, N.Y.

"It's almost too simple, but for IBM, it represents a milestone that I haven't seen before," Albert added.

graphicThe new system, called the eServer zSeries 900 - the "z" standing for "zero downtime" - is the latest system in IBM's mainframe line, which used to be called S/390.

Additionally, IBM's RS/6000 server line has been renamed the eServer pSeries, the "p" standing for "performance." The AS/400 line has been designated the eServer iSeries, the "i" standing for "integrated system." And the Netfinity and Numa-Q Intel processor based servers are now classified as the eServer xSeries.

Executives at IBM (IBM: Research, Estimates) said Tuesday's announcement is more than just a change in the way it names its servers.

Instead, it represents a whole new approach to doing business that makes it simpler for businesses to deploy different elements of their Web infrastructure and integrate hardware technologies, software and services across server types, regardless of the operating system, according to Rich Lechner, vice president of E-business strategy at IBM.

Additionally, by unifying its server business, the company will be better able to transfer some of the technology from its high-end mainframes throughout the server line, Lechner added.

graphic"It's not just a coat of paint," Lechner said. "We're taking a lot of the attributes from the mainframe and driving those across the entire server family."

For example, he said all the new eServers will enable users to pay only for processing power they need, "turning on" extra processors and paying for that extra computing horsepower only when they need it. That's a pricing model similar to one Hewlett-Packard described when it introduced its latest server, dubbed "SuperDome," last month.

"You've been seeing a lot of our competitors with a fair amount of mainframe envy out there trying to capture the same characteristics that we've had in the S/390 for years now," Lechner said. "What we're doing is raising the bar on that."

The market for servers has become fiercely competitive in recent years amid soaring demand for the hardware that makes up the backbone of the Internet. Sun Microsystems, Hewlett-Packard and Compaq are Big Blue's chief rivals in that space.

While IBM has made a lot of headway in the market, critics have said that the organization of the company's server business had been fragmented, which undercut a lot of its efforts there.

graphicBut over the last several months, IBM has unified its server sales force, and the company plans to spend roughly $75 million to build brand awareness of the eServer line over the remainder of this year. Next year, it plans to spend $250 million marketing the eServers.

"They're now showing that they don't care which part of IBM wins the business, as long as it isn't Sun, Compaq or Hewlett-Packard," Albert said. "And that is something that they have never focused on, because they were always competing among themselves."

Despite the announcement, IBM (IBM: Research, Estimates) shares fell sharply Tuesday, finishing $6.62 lower at $111.19. Meanwhile, Sun (SUNW: Research, Estimates) was off $4.72 at $108.84; Hewlett-Packard (HWP: Research, Estimates) fell 25 cents to $93.56; and Compaq (CPQ: Research, Estimates) was off 67 cents at $27.62. Back to top


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