IBM System X and the Power of Marketing, Part 2: Reality

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    In a previous post, I wrote about the importance of having a strong marketing unit, which can assure a firm’s success. The idea that triggered the post came when the IBM System X platform took on all takers at a very well-instrumented bid and won decisively in Europe for the European Commission. This win, however, is in sharp contrast to IBM sales performance with the same product, which indicates that the perception of this product elsewhere is lagging. This provides a unique opportunity for IT buyers, who can likely get unusual concessions from IBM and still receive what may be the best solution on the market.

    European Commission Requirements

    The European Commission is the organization that monitors the behavior of companies like IBM and helps ensure competitiveness in the EU. This means their choices are closely watched and, particularly in this case, verified prior to the bid being accepted to make sure that the claims that have been made on reliability, scalability, RAS and expansion are accurate. After hearing IBM had won this deal, I did some research on just what the bid review contained and was impressed with the thoroughness of the approach.

    The analysis split 50 percent on price and 50 percent on performance, and it included a functional, in-depth review of the ecological, environmental, ergonomic and conservation aspects of the offering. This included recycling, package and power consumption. On the performance review, they looked at general and specific performance benchmarks and many of the tests were made on premise.

    The financial analysis looked at total system cost (including service, maintenance and the cost for the required Service Level Agreements). They reviewed the historic quality of the services and the final TCO estimate included all of these plus power-consumption estimates at scale based on the testing and known loading for the solution.

    It is interesting to note that IBM was ranked number one in all of the criteria, which supports my assumption that it was the best solution and the best value by a significant margin. Generally, these two conclusions tend to be mutually exclusive; the best solution from a performance standpoint isn’t usually the best value because of a high relative cost. In this case, IBM had the best performance and the best value solution. For the most part, these were high-end X5 flex systems.


    While advocacy is always important to any vendor, a government regulatory body tends to use the most rigorous of testing methodology, largely because a problem with bidding is far more embarrassing for an organization that is set up to catch vendors who misbehave. Any selection of a vendor that was challenged—and bids like this are commonly challenged—where the challenge was won, would cost some people their jobs and certainly their stature in the government community. This is why solutions like this are tested rigorously.

    A bid won in this category is considered a much higher win, because it is less likely that the vendor gamed the system or bought the account, because it would be too vulnerable to audit, not to mention it would be a government-career suicide. The European Commission’s choice, whatever it is, is more indicative of product quality than a similar bid won in the private sector. And after seeing the Affordable Care Act debacle, it’s likely better than the U.S. methodology, too.

    Wrapping Up: IT Advantages

    This creates a rather unique opportunity for IT in that IBM appears to have one of the best solutions, based on this bid win. And the company is being hit hard competitively, so it is also likely aggressively bidding against the major players. This means that if you manage your bid process well, you could get a top-notch solution for an incredible price for both the initial solution and the maintenance—if you play your cards right.

    The European Commission bid win also showcases the benefit of a strong, well-funded marketing department in that we can know the cost of IBM not having one. IBM will have to buy the business it should have been able to win on merit alone, and while that is a huge benefit to you, it is clearly not cost optimal for IBM. A strong, well-funded, marketing organization is important and having the best product alone doesn’t guarantee success. In this case, it can, however, get your IT department one hell of a deal.

    Rob Enderle
    Rob Enderle
    As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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