System iNetwork

August 2, 2007

New Analyst Reports Tout System i TCO in Midsize Companies

IBM has posted a couple of new interesting System i analyst reports that cover the System i's lower total cost of ownership and overall business value.

The first, "The Business Value of IBM System i in Midsize Business Deployments," was written by IDC analysts Jean Bozman and Randy Perry. The report was sponsored by IBM and published in July.

The IDC report covers key IT issues faced by small- and medium-sized businesses, and utilizes data from previous studies on consolidation and overall operational costs. IDC also addresses total cost of ownership and total cost of acquisition, none of which is new information to most System i managers; however, IDC does make a particularly useful point about IBM's midsize company strategy:

"By reducing the entry prices, IBM intends to create more SMB market momentum behind its POWER processor-based System i servers. . . . With an expanded focus on midsize customer sites, IBM is taking the hardware price discussion 'off the table' by offering competitive prices within the volume server price range (servers priced less than $25,000). Instead, it is moving the discussion to business solutions, including system hardware and software provided by IBM, packaged software from ISV partners, and services generally provided by IBM channel partners."

We all know that entry price is a barrier, especially for smaller organizations. I'm not sure that the entry price can be swept off the table entirely, but if smaller organizations can stop looking at it long enough to hear IBM's business-focused messages, there's hope for new System i sales.

The second report, "Value Proposition for IBM System i: Cost/Benefit Case for JD Edwards World Deployment in Small and Midsize Businesses," was written by International Technology Group and also developed with funding from IBM.

This report deals with two potential approaches for midsize companies looking for an ERP solution: JD Edwards World deployed on the IBM System i platform and Microsoft Windows server-based ERP systems.

"Certain differences are immediately apparent," the report notes. "Few, if any, Windows server-based ERP systems focus on simplicity of operation and administration in the same manner as World software. Equally, there is no serious industry dispute that the Windows server environment has proved less reliable and secure than the System i platform. Which leaves lower costs — or, at least, the perception of these — as the primary argument in favor of Windows server-based approaches. But is that perception correct?"

You already know the answer to the question posed above . . . but if you're looking for more detailed proof, it's in the report.

Posted by cmaxcer at August 2, 2007 9:40 AM