IBM Hones Hardware Edge

"We're trying to accelerate new client acquisitions, new System i sales," Shearer says. "Since the beginning of the AS/400, that's always been best achieved by solving a client's business problem."

"Our application focus is designed around simplicity and integration," he says.

That involves combining IBM hardware and system software with business products as well as targeting local markets, Shearer says. IBM is working with local application providers in specific "industry verticals" who can market and sell the entire package to local small- and medium-sized businesses.

For example, IBM is working with a New York City firm that specializes in applications for labor unions. The local company packages System i with its own industry-oriented application and sells it to that specific market. In this case, labor unions are the target market.

"We're trying to co-market with [local firms]," Shearer says. "[We're] relying on our business partners to provide the industry-specific skills and solutions."

IBM started the revamped program in the fourth quarter in 10 market segments (such as local produce providers in France and local retailers in Australia) and will expand to 80 in the current quarter.

The new packaging approach could be the jumpstart that the segment needs to return to growth.

"Trying to push servers out the door ... just doesn't make sense on its own," Caughey said. "Good for them that they figured it out."

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