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IBM brand challenged
October 5, 2000: 3:40 p.m. ET

North Carolina start-up says it has used 'eServer' name since 1997
By Staff Writer Richard Richtmyer
graphic graphic
NEW YORK (CNNfn) - Would the real "eServer" please stand up?

That's the question Larry Deaton said his customers will be asking now that tech titan IBM Corp. has decided to stamp that name on all the network servers it sells.

Deaton, chief executive of Technauts Inc., a small networking-software developer in North Carolina with 50 employees, said his company has used the eServer brand name as the cornerstone of its marketing efforts for the past three years.

That's why when IBM announced its latest server initiative Tuesday, Deaton said his phone immediately started to ring.

"I go two calls," he said. "One was from a customer who asked if we had sold our company. The other was from an investor that said 'What's going on here?' The view was that IBM was using our name."

graphicTechnauts has been using the eServer name since 1997 and applied for trademark protection in 1998, according to Deaton.

IBM unveiled its eServer brand Tuesday as part of a broader campaign aimed at stepping up sales of its network servers, which are designed to meet the needs of Internet-based businesses. By folding all its server products into one division and under a single banner, IBM said it also is trying to make it easier for customers to integrate the various elements of their Internet infrastructures, regardless of the underlying hardware and operating systems.

Some IBM (IBM: Research, Estimates) watchers praised the move, saying it will clear up customer confusion about Big Blue's various server offerings, which previously had gone by such colorless names as AS/400, RS/6000 and S/390.

But Deaton said the move may have the opposite effect, considering Technauts' existing efforts in the same market IBM is targeting with its eServer products.

"My concern is it's creating great confusion in the marketplace," he said.

Founded in 1997, Technauts develops software that runs on network servers that are aimed at Internet service providers and other companies that provide Web-based services. Over the past three months, the company has announced a string of partnerships with several big-name technology outfits including Sun Microsystems (SUNW: Research, Estimates), one of IBM's chief rivals in the server market.

"Clearly, we're going to be in similar markets as IBM's eServer series," Deaton said.

What's in a name?

Countering Technauts' claim that it is snatching up what already was an existing brand in the marketplace, IBM said its latest server campaign is merely an extension of its existing "e-business" marketing initiative, which it started more than three years ago.

graphicThe IBM eServer brand consists of its established "e-business" logo, which is a cursive letter "e" with a circle around it, followed by the descriptive term, "server," explained IBM spokesman James Sciales.

"We've been offering products and services using that e-business logo for over three years," Sciales said. "We own that, and it's well established."

Sciales would not say whether IBM was aware of Technauts' brand positioning prior to moving ahead with its decision to use the eServer name for its products.

Deaton said that with all the noise his company has been making in the market recently, it is highly unlikely that IBM was unaware of what it was doing. "We are confident that they have knowledge of us in the marketplace," he said. "We've publicly announced deals with Sun Microsystems and Intel and Hitachi, and I'm sure IBM has picked up on that."

As for IBM's explanation that its eServer is different from Technauts' eServer because of the trademarked "e" in the name, Deaton said it all really sounds the same.

"Whether it's their trademarked 'e' or a regular 'e,' our concern is that it's creating confusion in the marketplace, among our existing customers and potential customers," he said.

Since the company just became aware of IBM's use of the eServer name when it announced its latest server campaign Tuesday, Technauts has not yet taken any legal action, Deaton said.

While he did not rule out a legal battle, Deaton said he first intends to discuss the matter with IBM executives and try to come up with some sort of resolution.

"We're going to aggressively pursue all alternatives," he said. Back to top


IBM revamps server line - Oct. 3, 2000




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