Brian Corrigan, ARN (BC): These mid-range servers have been around for a long time. So what is new?

Raj Thakur, IBM (RJ): For the first time we now have a product that is truly aimed at what I would call the SMB market. That means a lot of different things depending on who you talk to. For IBM, an SMB customer could be something as large as Dairy Farmers. At the other end, some customers don't have a lot of people but spend a lot on technology. We are aiming at a point in the market that has traditionally been a sweet spot for Intel-based servers, particularly in the applications space at that price point. This is 40-250 users.

The opportunity for us is about how we are packaging the product in line with how SMB customers are buying their technology, particularly operating system licensing. We are moving to user-based pricing and employing a model where we deliver full capacity. In the past we have not given customers full access to the power within the machine; it was governed to a certain extent and you had to pay extra for more processing power. This means customers can now run additional workloads without additional costs.

BC: So where do the resellers here today see their sweet spot and what impact do you expect this announcement to have?

Norm Jeffries, Computer Merchants (NJ): We have a client in Melbourne that has been looking at refreshing old technology for some time. The server they are running now is seven years old. The solution they wanted would have cost about $300,000 for two servers and a little bit of high availability software. The new announcement has brought that price down to $200,000. It was unlikely they would get it into the budget at the old price but now it looks like it will go ahead.

We have some customers that might only have five or 10 users but currently run their business on System i. I guess they welcome any opportunity to see that sort of saving and it will definitely have a big impact for them. Our sweet spot is really servers around $50,000 and below.

Steve Murphy, Frontline Systems (SM): We have seen big price drops from various hardware vendors and our volumes have gone up. That has been great to see. As far as our sweet spot is concerned, it is definitely $50,000 to $100,000 server plus storage and managed services business.

Mark Johnston, Service Elements (MJ): We would be pretty much inline with what Norm [Jeffries] said. The new pricing really does advantage those organisations that have 5-40 users because user-based pricing fixes problems there. They might have been looking at boxes with a list price of $150,000 but now find they are a hell of a lot less than that. It's opened up opportunities for those organisations to stop and think whether they need to go away from an environment they have known and loved for years but perceived as very expensive to own. They can roll the dice again with a new box instead of turfing it all out and starting again with Intel machines.