IBM Extends VARs' Services Offerings On iSeries Servers

As its iSeries server business continues to grow, IBM is expanding the range of related services solution providers can offer. Joyce Bordash, IBM's director of channel marketing for iSeries servers, said the vendor will add training so that providers can deliver application startup efforts and will partner with IBM Global Financing to provide new e-hosting services.

IBM's training will cover startup services on a number of workloads for the iSeries, including Linux, WebSphere, Windows integration and Domino, Bordash said. Solution providers who pass the exam for a particular workload will be qualified to perform related startup services and, potentially, continue serving the customer after startup, she said.

While these workload startup services are currently limited to the iSeries model 810, Bordash said IBM hopes to extend them to other iSeries servers. Bordash reckons about 300 people--representing 140 North American solution providers out of the total 650 that work with iSeries servers--are already skilled in iSeries startup services.

Bordash added that only a few of IBM's solution providers now have the ability to offer e-business hosting on iSeries servers. IBM aims to change the situation in one of two ways.

Dedicated e-hosting is the first. This scenario lets a customer move an iSeries server to an IBM Global Services hosting center. While this has been possible for a while, solution providers now benefit from that move by qualifying for a lead pass fee of 8 percent of the first year's revenue, Bordash said. "This is for the masses of business partners," she said. "They don't need the exact skill sets. There is no barrier to entry."The second, virtual services offering, targets customers who don't want to purchase the machines that host their applications. In this case, customers pay a startup fee to set up a logical partition on an iSeries 870, then makes payments based needed capacity. Solution providers selling this service will receive 8 percent of the first year's revenue--plus residuals paid every 90 days--for as long as the contract lasts, Bordash said.

The new iSeries services are great for a range of customers who want to run at least part of their operations on servers as reliable as iSeries, said Rick Kearney, president and CEO of Mainline Information Systems, a Tallahassee, Fla.-based IBM solution provider.

While Kearney said iSeries' future looks great, there are always customers who question the servers' outlook. "There's always a percentage of customers who consider going open but are happy with their applications," he said. "Or those who consider the availability of local iSeries skills, or who have key applications on iSeries servers but other applications moving to open systems or Wintel platforms."

Such customers can get a complete environment, including WebSphere, databases and a service-level agreement (SLA), with iSeries hosting, Kearney said.

The iSeries also offers a compelling cost proposition for customers who decide to lease them, Kearney said. "We can offer a 36-month contract for services priced less than or equal to their current cost, but they don't have to own the machine or the management hassles," he said. "Customers can cancel after 18 months, or scale up with no extra cost. It's a win-win for us, and the customer to use the services offered by IGS."IBM's iSeries server business had flattened out a couple of years ago, but last year grew both in terms of shipments and revenue, Bordash said. She said iSeries server business is also expected to grow this year. About 87 percent of iSeries sales go through indirect sales channels, a figure that IBM hopes to bump to 89 percent this year, she said.