IBM's 'White Space' and where Informix fits in...

As I alluded to in my other post, the 'white space' are the customers that can afford an IBM solution but choose not to use IBM as a vendor, or a vendor of last resort. This means that you can include a customer that has legacy apps on IBM mainframes yet their LUW world contains no IBM products. IBM is hurting, although they won't admit it. Sure they made record profits on lesser revenue because they've been squeezing margins by cutting deep to the bone. There are two things occurring... 1) IBM is moving anything and everything they can to lower cost countries, regardless of the longer term effects on doing business. Who cares if it takes 24-48 hours longer to get a deal done if the customer never sees the pain of IBM's internal processes. You can only cut so much and once you start getting squeezed on margins, you enter a death spiral. You keep cutting costs, you lower the quality of service. Customers see this and they demand further cuts. 2) The 80/20 rule holds true for IBM. IBM gains 80% of their revenue from their top 20% of their customers. IBM's S&D (Sales and Distribution division) are farmers. They know how to build a relationship with a key account and to try and suck as much revenue as they can from the customer. IBM does not develop 'hunters'. Informix had 'hunters' and of course some good 'farmers'. IBM puts their lesser trained reps in the SMB and 'White Space' accounts. In IBM's sales hierarchy, an SMB rep is looked down upon while a rep who handles a 'key' client is a god. (Ok serf/royalty... same thing) IBM is also having some problems in the Information Management space. Ok, I live in Chicago. So if I see a local trend, I'm making an assumption that this is also a world wide trend. Here in Chicago, IBM is losing mainframe projects and accounts to SQLServer and .Net. That is, IBM customers are moving away from DB2 on the mainframe to Microsoft centric solutions. If you want, you can replace Microsoft with Oracle in some instances. The point is that the trend is to get away from the mainframe and on to smaller, more efficient machines that you can cluster. Even as an inefficient cluster, they are still cheaper than a mainframe centric solution. IBM tried z/Linux and that didn't gain much traction. Unless IBM can redefine the mainframe, their cash cow is going to be put down... This is *significant* because it represents an erosion of the DB2 customer base and by the time IBM management sees the problem, it will be too late. I mean that the customer has made the decision to migrate, it will take 2 years to do the migration, while IBM is still collecting revenue. When the migration is done, and the revenue flow stops, its too late for IBM to do anything to fix the problem. I've seen two major DB2 mainframe shops in Chicago start this transition. I'm sure if I looked hard enough I can find other shops doing this or have already done this. Customer defections are quieter than IBM's stealth headcount reductions. If IBM were to 'do the math'... they'd see the trend. Customers are moving away from IBM slowly and are looking at alternatives. IBM's 'White Space' is growing faster than they are gaining access to it. The big irony is that Informix sells in to the 'white space' because frankly, everyone still thinks that DB2 is IBM's database and doesn't equate IBM and Informix. Should we be thanking the smurt people behind IBM's stealth marketing of IDS? If IBM's core accounts are looking away from IBM's high margin products, and IBM can't sell in to the white space... do the math. You'll come to the same conclusion I did. Which is why Informix is key along with the potential acquisition of Sun. Informix could be a key component in a solution stack that makes Sun's IP a winner. With no benchmarks of Informix on Rock or on Cell, we don't know just how much better IDS is compared to the competition. This is also why I have made comments about why IBM SWG IM should lead with IDS in the LUW space and focus on the mainframe with DB2. Sure they can support DB2 in LUW but IDS has a better story. Again IBM, do the math. Run the numbers for LUW only and compare apples to apples. IDS is a better value proposition for the customers and for IBM. Lets be clear. I'm not talking about a 24-48 month problem. I'm talking about a 36-60 month problem that will lead in to a 10 year slump. IBM's management is a tad inbred and IBM will end up killing themselves off because of poor management decisions. If you don't believe me, look at Sun. ;-) But hey! What do I know? I'm just a Sunday 'arm chair' QB... ;-) -G