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From: Owner-OS2News@teamos2.org

Subject: OS2News: IBM PSP OS/2 Warp TeleSeminar, Mr. Thompson's Speech

   IBM PSP OS/2 Warp TeleSeminar, Mr. Thompson's Speech

   
                               WARP SPEED AHEAD:
               IBM'S LONG TERM COMMITTED STRATEGY WITH OS/2 WARP

                                       
    "OS/2 is the critical element on which we build all of the software
     that we move into the marketplace from a desktop point of view."
    
    "I can't imagine a day when OS/2 -- or better yet, the IBM company --
     doesn't support the investments that our customers have made far
     beyond the investments that we've made in OS/2 ourselves."
    
        
   John W. Thompson
       General Manager, IBM Personal Software Products Division
       
   
   THOMPSON: Well, thank you very much. And good morning, or good
   afternoon, everyone. I'm delighted to have this opportunity to spend
   some time with you to talk about our OS/2 plans, our strategy, and
   quite frankly, the one thing that's on many customers' minds, the
   commitment of our company to this product.
   
   I'm pleased to be joined by Amy and quite frankly a very strong
   customer, Bob Spicer, who will talk about their experience with the
   product and their view of where we are and where we need to go.
   
   I don't think there's a call that I make anywhere in the world where
   the first question I get isn't, What is IBM's true commitment to OS/2?
   And how is that instantiated in actions in the marketplace?
   
   And I think have the principal mission to speak on behalf of IBM for
   its commitment to this product. And let me start with a very simple
   view of OS/2 and our company's commitment: we believe that we are
   committed to customers first. We believe that we're committed to
   supporting our customers deliver the kinds of capability and
   technology that they need to extend their services either to their
   employees or their customers at large.
   
   And OS/2's been a critical part of the implementation of many of the
   leading mission-critical applications around the world. Very few of us
   use an ATM to extract money or acquire an airline ticket through a
   reservation system without OS/2 being a part of that. And I can't
   imagine a day when OS/2 -- or better yet, the IBM company -- doesn't
   support the investments that our customers have made far beyond the
   investments that we've made in OS/2 ourselves.
   
   I also think that our customers expect and want a range of choice.
   They want the capability to pick from the best products that exist in
   the marketplace and not be bound to a particular architectural
   framework by buying one product that leads them down a path to a
   commitment to another set of products that they may not necessarily
   want.
   
   They want a vendor that is committed to industry standards, a vendor
   that will provide for them the open platform choices that they need --
   not only in the operating system but in the middleware platforms that
   ride on top of that.
   
   And then finally, it's critically important that we protect the
   investment that each and every one of our customers have made around
   the world in OS/2 and OS/2 technology. And as I said, their
   investments pale in comparison.... I'm sorry, our investments pale in
   comparison to the ones that they've made. And so it's important for us
   to remember that as we think about OS/2's future.
   
   Now, let's flip the coin then, and let's talk about OS/2 and OS/2's
   importance to IBM. Our overall desktop software strategy has as its
   bedrock OS/2. OS/2 is the critical element on which we build all of
   the software that we move into the marketplace from a desktop point of
   view.
   
   That software business is well in excess of one billion dollars, and
   the returns on it are quite handsome for the IBM company. So to
   suggest that we would walk away from OS/2 further suggests that we
   walk away not only from the platform itself but the overriding
   middleware technologies that we've delivered on top of the platform.
   
   It's important that we have a position in the client/server space --
   particularly the Intel space -- because that's a segment of the
   marketplace that is growing extremely rapidly. As a matter of fact,
   between 1994 and 1999 -- the strategic timeframe -- it's projected
   that Intel servers will grow almost twenty-two percent...well in
   excess of two and a half million servers installed. And so
   participating in that space becomes critically important for us.
   
   And most customers if not all customers want an integrated
   client/server solution. So having a client that's fully integrated and
   married, if you will, to the server platform, becomes an important
   weapon in our arsenal for delivering the best client/server
   alternative.
   
   Now, 1995 was a fairly interesting year for us. We started the year
   like a house afire. And as the year unfolded, there were many, many
   questions about OS/2's success in the marketplace, and quite frankly,
   whether or not we were going to stay the course.
   
   But I think the year as it wound down demonstrated that we were in
   fact committed to staying in this space. We shipped almost 5.3 million
   units of OS/2 in 1995, bringing life to date shipments to in excess of
   six million and OS/2's installed base to almost thirteen million
   units.
   
   As a matter of fact, in December we had our best month of the entire
   year where we shipped well over a million units on a worldwide basis
   in the month of December -- after the hype of Windows 95 and the
   reality of what it had in fact produced in the marketplace.
   
   In addition to that, what customers want more than anything else are
   apps. They don't buy operating systems for operating systems' sake.
   What they buy are applications that are enabled by an operating
   system. And in 1995 a number of vendors -- leading vendors from around
   the world -- committed to not only port their apps but build native
   apps on top of OS/2.
   
   The development team was awfully busy with much of our focus in 1995
   on delivering client-based enhancements. And so the Warp Connect
   enhancements and a number of the feature packs, if you will, that we
   delivered in 1995, were to strengthen our position in the client
   space.
   
   And at mid-year or a little after that, we shipped the first Beta
   version of Warp Server, which has gotten strong reviews. And you'll
   hear more about that as I go through the discussion here this morning.
   
   
   So given that kind of track record for 1995, what do we want to try to
   accomplish in 1996? And I've tried to boil those down to four simple
   things: the first is we have to position OS/2 Warp server as a server
   operating system that will span the range of application requirements
   our customers will choose -- not only file and print, but application
   serving as well.
   
   Second, we have to make sure that OS/2 Warp as a client operating
   system functions well with all servers -- not just OS/2 as a server,
   but other servers that will be available in our customer environment.
   
   Third, we have to make sure that OS/2 as a client is the preferred
   client to an OS/2 server solution. So the integrated notion of an OS/2
   client/server implementation becomes a very, very critical element in
   the strategy to ensure that we deliver the kind of functionality that
   our customers want at every step along the way.
   
   Then finally, we must position OS/2 as a product ## compete
   aggressively in the connected consumer space -- the space where people
   want to be able to migrate work from their office to their home or
   their home to their office. And they want to be able to access a range
   of online services either via the Internet or through fee-based
   services that are available to us on a worldwide basis.
   
   Those goals are fairly aggressive, but certainly ones that we believe
   we ought to focus on in 1996.
   
   Toward those goals, then, we've adopted a very simple strategy: the
   strategy essentially says, customers around the world have embraced
   OS/2 for seven or eight years. And we must protect the investment that
   they've made and protect our position in those enterprises while we
   look for opportunities in the marketplace to grow share.
   
   One of the areas where you will see us concentrate even more heavily
   in 1996 is on the growth in the server space. In addition to that, the
   implementation of server-based solutions by small and medium
   businesses. That does not at all suggest that we're going to walk away
   from our large enterprise customers who've made significant
   investment. Our focus there will be on delivering a set of extensions
   and enhancements to both the server product and the client product
   that will make them hopefully happy with the technology that we
   deliver in 1996.
   
   The second one -- the second element of the strategy, then -- is to
   deliver technology that's relevant to you; not technology for
   technology's sake but technology that we believe and you believe you
   need in order to extend the capabilities of your IT in frastructure
   out to a broader range of users be it within your enterprise or
   outside your enterprise.
   
   The relevant technologies will be those that are hot -- like Java and
   things of that nature -- and those that are at the bedrock of you
   doing a stronger, more effective job in application development...like
   our Open Doc run-time support.
   
   And then finally, the third element of the strategy is to become
   crystal clear and very consistent in our communications about OS/2,
   its future direction, and its importance to the IBM company and to the
   IBM company's customers.
   
   I think if we can accomplish those things, if we execute well
   throughout 1996, we will be able to demonstrate to you once and for
   all that the IBM company stands behind this product and the product
   family.
   
   Now, some of you may have read in a number of industry journals on a
   worldwide basis of our product plans for 1996. But let me just quickly
   highlight what we plan to do, and if there are questions on this I
   suspect I'll get them in the Q&A section.
   
   The first thing that you will see is this month we will announce a new
   server products, called OS/2 Warp Server. And Warp Server will be the
   integration of not only the OS/2 Warp Connect base, but have LAN
   server and SystemsView for Workgroups all integrated in a single
   package.
   
   It will focus on the ease of install, ease of implementation aspects,
   to facilitate the migration from existing LAN environments to the OS/2
   environment, or the notion of having a small enterprise or an
   autonomous department to be able to set up an integrated OS/2 server
   without having to expend untold energy.
   
   A little bit later in the first quarter you will see the integrated
   server software stacks code-named "Eagle" delivered to the
   marketplace. They will represent integrated database, systems
   management, Internet, all server capabilities -- seven of them -- that
   will easily snap on to the OS/2 base and make it easy for you to
   extend application functionalities in areas that are important to your
   particular business.
   
   During the third quarter we will deliver a directory and security
   product that really focuses on the notion of distributed computing.
   And it uses industry-standard technology as its base, and gives you
   the capability to keep track of the activities that are going on
   across your enterprise from a single point.
   
   During the mid-year period of time we'll deliver a new client -- a
   client that we've talked about publicly code-named "Merlin." And
   Merlin is a refresh to the OS/2 Warp Connect client that exists in the
   marketplace today. It gives it not only new technology capability
   underneath like Open Doc run-time support and expanded set of APIs for
   application developers, but a new fit and finish with a new UI that
   gives you a better way to visually understand what's going on within
   the system at the point in time that you look at the display itself.
   
   And finally, before the third quarter finishes, we'll deliver
   expanded, enhanced SMP capability on both our client and server
   products -- giving us improved two-way and four-way SMP and much
   better performance in that environment.
   
   It's a fairly aggressive product plan, particularly when you consider
   that we're migrating our development team from Boca Raton, Florida, to
   Austin, Texas. We're very pleased with the yield that we have received
   from our team. As a matter of fact, it is the highest yield of any
   mission transfer ever executed in the IBM company.
   
   In the past, typically when we've moved missions from one laboratory
   to another, the yield is about fifty percent. In this particular case,
   the yield of the direct development team has been in excess of
   seventy-five percent. So we're really pleased with the way our team
   themselves have demonstrated their commitment to the product, and
   therefore their willingness to pick up and move their families to
   Austin, Texas, to be a part of our ongoing effort to provide a better
   product and better service to our customers.
   
   Now, let's talk a little bit more specifically about Warp Server --
   because Warp Server will be the first thing that you will see this
   year. As I said earlier, it will be from the Warp base. So the OS/2
   Warp Connect product that we shipped in 1995 will the base on which
   this new server platform will be delivered.
   
   It will have with it integrated file and print services capabilities,
   enhanced and integrated systems management capability, much, much
   stronger remote access as well as much stronger backup and recovery
   functionality. In addition to that, it will have Internet-ready
   capability which will allow you to use it as a Web server, and then
   finally, some advanced printer functionality.
   
   The principal focus of this offering is to reduce the cost of
   implementation of server-based technologies that more and more of you
   are using. The client product Merlin, again, built on the Warp Connect
   base -- the whole idea is to move to a common code base that makes the
   migration from one release to another much, much simpler to
   accomplish.
   
   As I stated earlier, it will have an enhanced user interface that
   makes it much easier for you to see what's active in the system at any
   given point in time. But it will include a number of features that we
   think are important to you or we hope you think are important, such as
   expanded plug-and-play capability, the capability to run extended
   edutainment type products, an integrated Web Explorer capability...
   
   It also has the Open Doc run-time, Open Doc being the object
   environment that we have built based upon the standards supported by
   CORBA and other standards organizations. It will have the DACS API
   run-time which are the extended APIs that we've released and worked
   with a number of developers to make sure that they can build an
   application once and have it run in multiple environments.
   
   It will be a platform for security enhancements, for ISVs to write
   expanded security capability for OS/2. And it will have an improved
   installation and ease of use capability that we think are important
   around the world.
   
   Now, those products really are critical to us. But what's critical to
   you is to make sure that there are applications that run on those
   products. And we'll continue our focus in 1996 on trying to ensure
   that the applications that you need are on the platform.
   
   Our focus will be on not only business-based applications for the
   server, but Internet-based applications as well -- because many
   customers around the world are becoming increasingly interested in the
   Internet and how the Internet plays in their environment. And a number
   of developers are making sure that they have the ability to play in
   that space.
   
   So we will concentrate on the Internet development activity that's
   going on for the OS/2 product. We'll work to migrate Win 95
   applications to OS/2 with a number of porting centers that we are
   installing around the world, the first of which was installed in
   Boston in 1995. We've had good success there so far.
   
   We'll continue to work in the United States with a firm called "Blue
   Orchard" to help in the distribution of ISV software as well as the
   32-bit alliance -- the whole idea being that once you've built the
   application we need to make sure that there's capability to reach the
   target markets that you've built the product for. So without channel
   access, you really can't move the product. And we think we have a role
   in helping you in that regard.
   
   Additionally, making sure that we spend an appropriate amount of
   matching money in cooperative advertising with you to make sure that
   when your products are Warp-ready that we're willing to promote that
   through cooperative advertising programs.
   
   And then finally, making sure that through our home page that people
   know of your existence and the applications you've built that run on
   the platform -- an important element in the overall OS/2 strategy and
   one that we must focus on every day of the week.
   
   So in summary, I think it's important to say that this is a very
   important product to the IBM company. It's important for a number of
   reasons: one, the investments that you our customers have made; two,
   the ISVs who've committed and built their business on the product; and
   three, the relative contribution that it makes to IBM's overall
   software business.
   
   We're building momentum. We had momentum coming out of the fourth
   quarter of the year. We were all pleasantly pleased by the December
   that we had, and we expect the first quarter to be equally strong. And
   we must continue to drive OS/2 volumes through the channels that are
   available around the world.
   
   The channel presence must expand because the market's growing faster
   than we can keep up through a direct sales force. So more investments
   must be made in channel programs and channel support programs to
   ensure that OS/2's presence continues to grow in the market.
   
   I hope that provides at least some insight for you into our plans and
   directions. And now what I'd like to do is just ask...Bob? Okay. I'm
   going to turn the podium over then to Bob Spicer who's going to share
   with you how his firm is using OS/2. Bob, are you with us?