November 17, 1997 (Vol. 19, Issue 46)
IBM users wait on I-commerce solutions
Customers remain loyal to Big Blue's "e-business" despite strong
competition
By Ed Scannell and Steven E. Brier
With about 70 percent of the corporate world's business data hosted in IBM mainframes
and with customers heavily invested in these systems, it would appear that the
Internet-commerce battle is Big Blue's to lose.
Nearly all enterprise vendors, including Sun Microsystems, Hewlett-Packard, and Compaq
Computer, are attacking IBM's mainframe stronghold with high-end servers and Internet
software. But many users queried say that despite their caution in doing business over the
Internet, they are sticking with IBM because of its track record for reliability and its
ability to approach I-commerce as a business problem.
Mainframes play a critical role for many Fortune 500 companies, but the nature of
I-commerce systems is mixed, which opens up the door for all enterprise suppliers.
"It's hard to find a shop that is `True Blue' these days. It is much more
heterogeneous an environment," says Michael A. Kahn, CEO of the Clipper Group, in
Wellesley, Mass.
"When push comes to shove, everybody has e-commerce, everybody has a Web server;
it's just where you buy the pieces from," Kahn says. "IBM has a lot of its own
branded pieces and has made a business out of that concept. But you can find a solution on
a Sun or an HP or on a variety of other platforms that are very similar."
"A lot of it comes down to focus," Kahn adds. "IBM is in a hundred
different businesses. Sun is in many fewer activities."
Although Unix vendors and now PC vendors offer servers and software that ensure
high-availability servers, analysts say that IBM has a significant advantage in the
reliability of its mainframes and in the loyalty that its users have to big iron and to
centralized architectures.
"We have been a very successful mainframe operation. People here keep trying to
distribute this stuff down lower, but it keeps coming back to how much money we are
spending to replicate these applications at about 40 or 80 sites," says Susan
Robinson, manager of systems programming at the Western New York Regional Information
Center (WNYRIC).
The WNYRIC operation, which provides more than 100 school districts with a range of
technology services, including payroll and the distribution of 250,000 report cards, is
anchored by an IBM S/390. The system is used as a Web server to manage more than 30 Web
sites.
Although Robinson likes what she hears about IBM's overall I-commerce initiative, she
and several others interviewed have some trepidation about completely entrusting
mission-critical data over the Web despite security technologies.
"Security and reliability are what we most worry about," Robinson says.
"I am concerned that if I ship my school district's payroll over the Internet, I have
lost it until it pops up at the other end. I am not sure how I can track that in the
middle yet. For now I would like to use a closed Systems Network Architecture network to
handle that type of processing."
Indeed, the marketing of I-commerce appears to be ahead of implementation: Although 80
percent of the Fortune 500 have Web sites, only 5 percent are selling products or services
on the Internet.
And although some large shops already committed to IBM have considered using lower-end
alternative hardware and software platforms, most said the scalability and availability
offered by Big Blue's mainframes still offers the most attractive solution.
"We are considering [IBM's] Net.Commerce on the S/390 platform because of the high
availability that we can achieve," says Mark Krause, senior technical analyst at
ComEd, a $6 billion public utility based in Chicago. "We can't get that sort of
availability on any other platforms right now. It is the most robust implementation
supporting SET [Secure Electronic Transaction protocol]."
ComEd's operation is centered around its three CMOS-based S/390 mainframes running
OS/390, a DB2 database, and CICS (a mainframe query system) to run a number of
applications including its customer information and marketing system and the company Web
page. The company is using two different Web servers, IBM's Internet Connection Secure
Server alongside Microsoft's IIS, to control its intranets and Internet servers.
Although things have gone fairly smoothly, Krause anticipates some integration problems
down the line with the IBM and Microsoft-based Internet servers, particularly with Java
and ActiveX.
"I think it is going to cause some issues," Krause explains. "We have
not been able to integrate the platforms as seamlessly as I would like to because we are
doing the development with IIS and so forth. It just doesn't translate well
directly."
Some users say IBM's $200 million marketing campaign helps position it well. The
company has been running television commercials during prime time to win mind share as the
company to trust for I-commerce business solutions.
"I think what IBM has done possibly better than HP or Sun, possibly because they
see themselves following a different business model, is that they don't say, `We're the
guy with the Unix box.' They say, `We're the guy for e-commerce,'" Kahn says. "I
give them a lot of credit for their marketing."
"They are basically trying to say that `What makes us different is not our box,
not our price, not even our software, but the business perspective we have when dealing
with you and the value we hope you'll get from our box,'" Kahn says.
IBM's "e-business" framework
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