The IBM System i computers are IBM's proprietary mid-range computers, based on the AS/400 legacy. With the introduction of the 515 and 525 Express models, IBM is attempting to reclaim its once strong position in the small and mid-sized enterprise (SME). The 515 enters the market with a list price of $7,999 for a basic configuration, placing it well within the reach of small enterprises. By eliminating performance restrictions on the Power5 processor and moving to per-user licensing, IBM hopes to compete with x64-based servers in the small enterprise and reverse declining Systemi revenue.

New Customers are the Focus

IBM's April 10, 2007 announcement focused heavily on their renewed interest in SMEs. IBM estimated that about 2,500 independent software vendors (ISVs) are now providing applications for the System i computers. Many of these ISVs provide vertical applications for specific industries, regions or languages.

The marketing push accompanying these new entry-level System i offerings targets new customers needing to incorporate fresh applications into their business. IBM is not, initially, aiming to replace existing applications or existing servers. Ideally, clients would use the System i, running i5/OS (once known as AS/400 OS), to implement new, enterprise-specific applications...