11:00am US Eastern Time August 2nd, 2007

iSociety says: Welcome to another Fireside chat.

iSociety says: Our topic today is the recent re-organization at IBM.

iSociety says: Welcome to Mark Shearer

Question from iSociety: Mark, can you outline the reorganization at an overview level?

MShearer says: You bet - In the past couple of weeks we've made two important sets of announcements:

First, we introduced our first Power 6 based System i product, the i570 and previewed V6R1 of i5/OS that will be available next year. This is an exciting announcement for the System i community, as it demonstrates our commitment to bring i5/OS clients forward to the next generation of hardware as well as our continued investment in enhancing i5/OS.

Second, we announced the creation of the Power Systems and Business Systems units. These two business units were created in response to client feedback about two very distinct sets of client needs: Our large System i clients were demanding a set of capabilities that were truly enterprise class in nature; the small and medium business companies are demanding continued innovation in integration and simplicity. Our Power Systems unit will focus on our i570, i595 and AIX based products. Our Business Systems unit will focus on i515, i525 and i550 products and clients.

Question from iSociety: Is the reorganization a good thing for System i customers...

MShearer says: Absolutely. As you know, I've spent the past 2 1/2 years visiting clients and user groups in about 30 countries. The large clients clearly articulate that they don't like being grouped with the broad SMB client needs; that their needs are different. The result of the org changes will be better products, a very clear long term hardware roadmap, and innovative new capabilities. For example, i5/OS will be supported in new places......... as you know, one of our most successful products in IBM has been the IBM Bladecenter -watch this space for a red hot Power6 blade with i5/OS support!

Question from Alucas: If there are specific hardware, OS needs that affect only SMB, will the product change to meet those requirements?

MShearer says: Absolutely - it already has. The 515 and 525 offerings were created UNIQUELY for the needs of smaller businesses, and how they want to buy systems. The user based pricing was precisely done for the unique SMB needs.

Question from Nandelin: I got the impression that both new business units would be offering Windows, Linux, AIX, and I5/OS solutions.  Is that correct?

MShearer says: One of the common themes around all of IBM's recent announcements, is our desire to align our capabilities around clients and markets rather than technology. One piece of this announcement was a new approach to client sales in the SMB market. As many of you know, in the past, when IBM showed up at your door, we often showed up as z reps, i reps, p reps, storage reps. Many of you told us that you view us all as IBM..... and why didn't we represent all of IBMs capabilities vs just selling one product or technology. Now, in the SMB market, we'll begin rolling out "systems sales reps" that can sell what you need, whether it’s Intel, i5/OS, Unix, mainframes or storage. This is in direct response to what our clients have asked us to do.... to be more solutions focused. It's a trend not just in STG, but all IBM , to align around our clients rather than our technologies. I think this is a great move.

Question from iSociety: In the new Organizational structure, will you still have responsibility for the System i?

MShearer says: I've got the product responsibility for all of our i5/OS, AIX and Linux on Power systems. I'll be majoring on the future product strategy; I will not have the marketing and sales responsibilities. This means - I've got all the power products: System p, System i and the associated operating systems. When you combine the best of these capabilities, we can do great things for our i clients!

Note from Alucas: Mark, it makes a great deal of sense!  Thank you for listening to the clients!!

Question from iSociety: At the OCEAN User Group meeting last month, Elaine mentioned that i5/OS might appear on Blades. Can you tell us more?

MShearer says: Why not :D

We've recently previewed i5/OS V6...... which will be available in the 1st half of next year later this year, you'll see IBM's first Power6 blade...... which will be blisteringly awesome. And if you put two and two together....... you'lll have one hot blade and one cool operating system.

Question from iSociety: Which group will market and support i5/OS?

MShearer says: Both - the Power Systems reps and Business Systems reps will be selling the System i product line with i5/OS. Most clients will see virtually no change in terms of the support offered to them.

Question from Alucas: From a tactical standpoint, if an SMB customer has a problem will they call a different 800-HELP or will they be routed based on customer #. The "real" question is...how visible will the reorg be to the customer

MShearer says: No change! You all told us that Rochester support is half the reason you love System i...... as a matter of fact, our System p colleagues are taking notes, as many of their clients are asking for "Rochester" class support.

Question from iSociety: Will User based pricing move to all the models of System i?

MShearer says: User based pricing is a perfect fit for small and medium sized systems; for the larger systems, we're going to provide "pay for what you use" pricing through the new i5/OS edition which was recently announced for our Power 6 i570. So our approach for the high end is more granularity in the software charges for each engine..... It's a simpler approach for granular pricing at the high end.

Question from iSociety: Can you tell us where some of our other favorite System i folks are now located?  Jim Herring, Elaine Lennox and Mike Smith to start.

MShearer says: You can't get rid of any of us ! Here's the line up:

Jim Herring is Director of High End Power Systems - he's got responsibility for ALL of IBM's large power systems (read that System p and System i).

Elaine Lennox is Marketing VP of Program operations and the mid market program for all IBM Systems....... and she'll be actively engaged in promoting System i and Power Systems across the board.

Mike Smith - continues to be key product architect for i5/OS and related Business Systems software

Question from Alucas: Will you have "influence" on sales and marketing?

MShearer says: Have you ever known me to be quiet about my point of view in sales and marketing?

Question from iSociety: Will the main development for i5/OS remain in Rochester?

MShearer says: Rochester will continue to be the heart of i5/OS development...... but keep in mind we also have 100's of developers in Mexico and China. We'll certainly be working closely with our AIX software teams as well.

Question from Alison: Will you still attend COMMON?

MShearer says: I'm going for the IBM record......... of course

Question from iSociety: Will all IBM software products follow these same models for pricing?

MShearer says: We're working very closely with the key middleware brands to take advantage of the new pricing constructs.

Question from iSociety: We seem to be making headway with the Academic Initiative.  Will that group still be actively working for System i?  and will they report to you?

MShearer says: I'm very excited about the thousands of students currently enrolled in i5/OS curriculum around the world........ The team that supports that is part of our STG support team...... and organizationally hasn't been part of the System i unit...... but they've been doing the work for us and will continue to do so.

Question from iSociety: Should we start considering System p (AIX) in our local user group events?

MShearer says: That's a really interesting question ......... the fact of the matter is that the i5/OS users have a lot of X86 and Unix systems combined with their System i's........ as you know, with things like blades with i5/OS or AIX on System i, we're trying to make it easy to manage the whole environment........ and bring i management qualities to the whole infrastructure....... It's a real interesting question for both the user groups and IBM to consider!

Question from iSociety: Have you had any discussions with COMMON about opening up to System p?

MShearer says: It hasn't come up yet - I'm very committed to continue my working relationship with COMMON and the other user groups....... it's worth exploring!

Question from iSociety: We have heard an overview of V6R1.  Do you know the date when this will be announced and available?

MShearer says: You know I'm not going there :)  "1st half"

- it's i5/OS, V6R1

iSociety says: Mark, thanks for your time today - any closing comments?

MShearer says: I'm very excited about the System i and i5/OS, and the possibilities going forward. As you know, one of the most notable things about this platform over nearly 3 decades is that our clients have been able to bring their application forward generation to generation, thru changes in hardware, evolution of operating system, the world of virtualization. With the hardware and software technologies we're investing in, I think  the next generation of systems for our i clients will be outstanding....... and I think it's terrific that I get the opportunity to be responsible for that.

iSociety says: Thanks Mark - and thanks to everyone for joining  us today.