The long-anticipated server, a replacement for the S/390 mainframe, is IBM's gambit to catch Su, which has been stealing IBM e-commerce and Internet sales with its high-end Unix servers. The eServer line "replaces all the server products we have previously had in the market," boasted Mr Bill Zeitler, senior vice president of IBM's server group. In less dramatic terms, it's a new product label for the major server product lines.

But analysts warn IBM has more to lose than gain in the rebranding and must execute flawlessly just to maintain existing market share. "This rebranding is a real gamble by IBM," Gartner analyst Tom Bittman said. "What they're doing is throwing away existing brand awareness and starting over." But Mr Bittman concedes IBM has few choices if it hopes to move ahead.

"Bottom line is IBM is in third place in Unix servers and third place in Intel servers, and they're not going to fix that by throwing more and more money at that problem." Sun is the Unix server sales leader, followed by Hewlett-Packard, while Compaq Computer and Dell Computer lead in Intel server market share. "We don't expect IBM to capture the No 2 spot in Unix servers over the next three years," Mr Bittman said. "If that's what they wanted to get out of this, they're not going to get it." Several issues have limited IBM in selling servers, and the previous multiple brands perhaps top the list, say analysts. "Traditionally, there's been a series of products within IBM that overlapped and confused their customers," said Technology Business Research analyst Bob Sutherland. "So potential customers could end up having a variety of different sales people hawk their servers for the same applications." Part of the problem is segregation among product groups.

Sales of AS/400 servers and Netfinity, IBM's line of Intel-based servers, are handled by different organisations. This creates confusion and opportunities for rivals such as Dell or Sun to sell servers alongside IBM's offerings. Sutherland said sales and organizational changes that "refocus on the customer need" are vital for IBM. "This is a positive thing, because I've always felt customers should understand what they need rather than...seek out from sales people," he said. Mr Rich Lechner, IBM's vice president of e-business strategy, insists the company had already been sorting out the sales issues among the competing server groups. "Earlier this year, we implemented an integration of our sales force with the creation of a server solution specialist who represents to our large customers all of our servers. So this is just the next step in the evolution," he said. IBM for a time will continue to sell existing server lines - S/390, RS/6000, AS/400, Netfinity and NUMA-Q - as e-series replacements areintroduced. While the "z" family is the first, others will follow, including the "i" and "p" series. "I have to emphasise it's a big gamble," Mr Bittman said.

"If IBM doesn't invest enough, they don't get up to ground zero, which is building the same brand equity they already have."

Crucial to the success of IBM's rebranding effort will be successful marketing. "It can't be a three-month, throw-money-at-the-problem program," Mr Bittman said. "They have to sustain it for a year or more." He also warned that IBM most resolve the ongoing sales issues. "If they act the same as yesterday and they just use the name, that's how it will be received," he said. IBM's Lechner emphasized the rebranding's broader significance. "This is not just a new coat of paint or a rebranding," he said. "To be a member of the eServer family has real technical and business significance. There are characteristics that are exhibited across the family." IBM will begin selling the first eServer, the z900, December 18. The new server, previously Gartner analyst Thomas Bittman says that although the company is the market share leader in the combined server market, it holds only third place in both Unix and Intel servers-the two primary growth categories. IBM spent about two years and $1 billion designing the z900, whichwill also play an important role in IBM's push into Linux, particularly among Internet service providers, Lechner said. "With the z900 they can offer customers a virtual Linux server for $500," he said. "That's cheaper than anything you can do in the Intel or RISC space."

IBM also hopes to woo potential e-commerce customers with the z900's increased I/O capacity, which allows 2,000 transactions per second, or double that of the S/390. When servers are combined in what is called a cluster, that capacity boosts to 64,000 transactions a second, Mr Lechner said.

In arrangement with IndiaCNET.com