"IBM Beats Out MICROSOFT" (VARBusiness, 10/16/00) and related news reports

"Capacity-Based Pricing Stirs Up Market" VARBusiness Annual Report Card -- Database Software, By Marcia Kaplan, 10/16/00

What's the future of the database software market? Increasing domination by a handful of players, with the other vendors struggling to move beyond niche status. At least that's the view of one leading industry observer. Mark Shainman, an industry analyst with Stamford, Conn.-based research firm Meta Group, believes the product category is currently dominated by three vendors: IBM, Microsoft and Oracle. In fact, between them, Microsoft's SQL Server and Oracle's 8i have grabbed roughly 65 percent of the DBMS market, Shainman says. IBM, on the other hand, is coming on strong.

The database software results in this year's Annual Report Card-in which IBM finished first and Microsoft second-parallel Shainman's view to some degree. However, Oracle finished far back in fifth place, crippled by very low scores in the partnership areas of the survey.

Shainman believes that the changing pricing formula embraced by the leading vendors is helping provide IBM's DB2 with a major advantage. "With the release of IBM's DB2 V. 7.1 and Microsoft's SQL Server 2000, all three major DBMS vendors have embraced capacity-based pricing models," he explains. "IBM and Microsoft use a CPU-based model, while Oracle uses a power unit [PU] model. Under capacity-based pricing, DB2 and SQL Server are emerging as the low-cost options; under the PU pricing model, Oracle is three to five times the price of DB2." However, DB2 is not without flaws. "In a lot of verticals, ISV support is still an Achilles' heel of DB2. Microsoft and Oracle have better ISV support," Shainman says.

As for future technology trends, Shainman sees greater scalability on the NT platform and high availability in clustering.

"IBM Beats Out MICROSOFT" - VARBusiness, 10/16/00

After two years of finishing just behind arch-rival Microsoft , IBM wrested the top spot in this year's Annual Report Card database software product category.

IBM finished first or tied for first in seven of the 11 subcategories of the survey. The company won outright in key areas such as product quality and revenue/profit potential, as well as in post-sales and marketing support. It received its lowest score-a third-place finish- for ease of doing business.

"It shows that the initiatives we implemented last year are paying off," says Jim Kelly, vice president of data management marketing in IBM's software solutions division.

Kelly was particularly pleased that DB2 was ranked No. 1 in the revenue/profitability. "We put a lot of effort into improving that," he says.

Kelly credits IBM's lead over its competitors in postsales and marketing support to the company's revamping of its support function. "We took some aggressive actions to streamline how we provide our free technical support," he explains. Electronic assistance, mentoring and education are key elements of IBM's offerings.

IBM's scores were generally strong in areas measuring partnership efforts. Kelly attributes IBM's top placement in communication and e-business programs to IBM's becoming more fully engaged with emerging business models such as ASPs, noting more than 1,000 Web integrators support the DB2 product line. Kelly also says that DB2 has had 11 consecutive quarters of growth at three times the industry average. IBM thinks it's on a roll; our survey results seem to bear this sentiment out.

Definition Of Criteria

Product quality/functionality: Reliability, robustness, data security, interoperability with existing data, compatibility with development tools, scalability, support for multiple operating systems and third-party applications, breadth of utilities/add-on products, and ease of administration

Product availability: Availability of announced products, easy access to products including online downloadable software, timely release of upgrades, and availability for multiple OSs

Revenue/profit potential: Product pricing, multi-user/site licensing options, gross margin points, and potential for value-added services and add-on sales

Presales support: Tech-support quality, accessibility, responsiveness, field-sales support, quotation and multi-vendor configuration/integration assistance, and joint sales calls

Postsales support/service: Tech-support quality, accessibility, responsiveness, technical training, and handling of patches and bug fixes Marketing support: Sales training, quality of sales leads and referrals, advertising, MDFs, spec sheets, literature, demo units, trade show support, and seminar assistance

Administration of solution-provider program: Authorization and certification process, quality of vendor personnel, access to beta products, facilitation of solution-provider partnering, and solution-provider feedback mechanisms

Communication: Timely information about promotions, program changes and new products, and ease of obtaining information

Channel strategy: Distribution policies, avoiding conflict with vendor direct sales and other reseller channels, and not undercutting the channel with online or direct pricing

E-business program: Secure partner Web site, online purchasing, online marketing/sales tools, online technical support, online presales support, and online incentives support

IBM Takes Top Honors in VARBusiness Annual Report Card

Three First-Place Wins and Lifetime Achievement Award Reflect Major Industry Recognition for IBM Business Partner Programs and Offerings

Breakaway XChange...San Diego, California, September 28 ... VARBusiness Magazine has presented IBM its Lifetime Achievement Award for the consistently high quality and value of IBM programs and offerings for solution providers across the industry. IBM was also awarded three first-place honors -- for AS/400, DB2*Universal Database and IBM WebSphere Commerce Suite -- at the publication's 15th Annual Report Card Awards During the Breakaway XChange Conference this week in San Diego.

"IBM is gratified to receive such a significant vote of approval from the thousands of solution providers who took part in the Annual Report Card," said Buell Duncan, general manager, IBM Global Business Partners. "We continue to enhance our PartnerWorld program offerings and our portfolio of e-business software to help Business Partners build a profitable business and reward them for delivering value to their customers. Today's results tell us we're on the right track."

IBM DB2* Universal Database was voted best overall Database Software and won in all three sub-categories for Products/Pricing, Support and Partnership. IBM Data Management Business Partners, now numbering more than 10,000, are a key part of IBM's go-to-market strategy. As the foundation for e-business, DB2 Universal Database is the industry's first multimedia, Web-ready relational database management system, strong enough to help Business Partners meet the demands of large corporations and flexible enough to serve medium-sized and small e-businesses. DB2 Universal Database combines integrated power for business intelligence, content management, enterprise information portals and e-business with industry-leading performance and reliability to drive the most demanding industry solutions. DB2 Universal Database together with Internet technology makes information easily accessible, available and secure. In 1999, IBM saw a 41% YTY increase in the number of Business Partners choosing DB2, and a 65% increase in the number of applications built on DB2, which now exceed 16,500.

For the second year in a row, IBM AS/400 was voted the number one Midrange Server by industry resellers. AS/400 also won in all three sub-categories for Products/Pricing, Support and Partnership. IBM AS/400e* was voted the number one Midrange Server by industry resellers for the second year in a row. Business Partners are IBM's channel of choice for AS/400, accounting for more than 75 percent of server shipments in the first half of 2000. By delivering an integrated business server, AS/400 lets Business Partners focus on their solutions and value-add services -- rather than spending time testing and integrating hardware and system software. AS/400 also incorporates cutting-edge IBM technologies, including copper and silicon-on-insulator processors, industry-leading Java support and a full range of e-business middleware, such as WebSphere, Domino and MQSeries. AS/400's reputation has been built on rapid deployment, low cost of ownership and rock-solid availability.

In addition, IBM WebSphere* Commerce Suite tied for first place as the overall winner for best Internet Software, and was voted number one in the Support and Partnership sub-categories. IBM's WebSphere Commerce Suite, the first integrated e-commerce solution, provides a wide range of easy-to-use features and functions for content management, relationship marketing, order management, and payment management for all types of Internet businesses, including business-to-business, business-to-consumer, and e-marketplaces. Sites built with WebSphere Commerce Suite can easily integrate with both internal and external systems and grow with the changing needs of an e-business.

To determine Annual Report Card winners, VARBusiness conducted in-depth research among thousands of Solution Providers to rate the performance of their vendors in product categories that included Internet software, systems, infrastructure, networking and peripherals. Solution providers were asked to judge the vendors on technology and innovation, support and services, use of the Web and ability to partner.

About IBM

IBM is the world's largest information technology company, with 80 years of leadership in helping businesses innovate. The IBM PartnerWorld marketing and enablement program is designed to create new revenue and marketing opportunities for IBM Business Partners, provides customers with e-business solutions including products, services, technologies and marketing. For more information, access www.ibm.com/partnerworld.