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2008: IBM has to make a virtualization move!

Although no one is suggesting it anywhere. I would seriously talk to Sam and tell him to take a good look at Citrix. These guys are ready to blow holes in the Virtualization market, if you don't pick it up, someone else will!

The slowdown in the financial services sector (which is where IBM does about half of its mainframe business and a lot of Unix and Windows server sales, too), has been discussed at length. But IBM didn't say anything about the shift in sales cycle when it reported its financial results for the third quarter, nor did it say bupkis about this change in its call with Wall Street analysts last week. And as it turns out, this may have been a big factor in IBM's sales bumpiness in 2007. According to Zeitler, IBM's sales cycles used to end at every quarter, but the company shifted to two six-month cycles in 2007. That gave sales reps and channel partners pushing servers, storage, and software the room they needed to cope with the inherently longer sales cycle in the data centers of the world these days. It also allows IBM to get half way through a year and make a shift in tactics, if necessary. Doing that four times a year is just too disruptive. But making the change the first time also had another effect, which Zeitler expressed with his usual dry wit. "We had a goal to create two fourth quarters," he said, referring to the annual bump in sales that usually comes at the end of the year, "and what we did is create two first quarters." With a new year comes new budgets, new uncertainties, and data centers full of new gear bought in the fourth quarter, so first quarter sales tend to be weakest of the fourth quarters in the IT space.


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