A Retrospective Analysis of IBM x86-based Server Customer Satisfaction
IBM System x Consistently Meets High Customer Expectations for Product and Service & Support A Retrospective Analysis of IBM x86-based Server Customer Satisfaction May2011 TBRT EC H N O LO G Y B U S I N ES S R ES E AR C H , I N C .
IBM System x Exhibits Strong Aptitude for Meeting Customer Expectations Executive Summary Because thex86 serverhas become the dominant computing platform in the datacenter, businesses demand high levels of product and service and support service quality from their server partners. IBM System x servers, as measured by TBR’s quarterlyx86-based Servers: Corporate IT Buying Behavior & Customer Satisfaction study,meet those needs by providing consistently high levels of hardware reliability, phone support as well as delivery times for new systems. IBM System x has long been recognized by customers for strong products and quality service. TBR believes that customers are rating IBM on what they see as itsparticular mix of product reliability and quality and service excellence, resulting in a feeling of overall value with high levels of satisfaction with System x servers. IBM’s System x has held the number-one ranking in TBR’s x86 server study for the last seven quarters as a result. The System x server line’s dominance in the TBR study during this timeframe is illustrated in the 16 incidences of competitive strength across six of the study’s satisfaction categories. TBR assigns competitive strengths when a vendor demonstrates brand differentiation by scoring substantially above industry averages and more effectively meeting—or exceeding—customer expectations. TBR x86-BASED SERVER SATISFACTION PERFORM ANCE DIFFERENTIATION, Past 7 Reporting Periods (3Q09 through 1Q11) Sources: TBR x86-based Servers: Corporate IT Buying Behavior & Customer Satisfaction Studies # Incidences Where TBR Assigned Competitive Strengths or 18 16 14 Phone Support, 3 12 Delivery Time, 3 10 M anagement Tools, 2 8 Warnings/ Weaknesses Energy Efficiency, 2 6 Virtualization 4 Solutions, 3 2 Hardw are 0 Reliability, 3 M anagement Tools, -2 Delivery Time, -2 -2 -4 Phone Support, -3 -6 -8 -10 -12 -14 Dell HP IBM2 TBR Whitepaper | May 2011 Technology Business Research Inc.
For this paper, TBR analyzed IBM’s competitive performance over the past sevenquarters within our Corporate IT Buying Behavior & Customer Satisfaction Studies in the x86-based server market. With this retrospective analysis, TBR zeroed in on the evidence that supports IBM’s continued ability to successfully meet customer expectations for System x server quality, reliability and technical support. TBR has determined that IBM’s continually strong performance in our study can be tied to the interrelated effects of four underlying principles: 1. Leading performance, reliability and efficiency:When compared to its counterparts in servers, Dell and HP, IBM consistentlydelivers higher marks in customer satisfaction for hardware quality and reliability, services and support and energy efficiency – areas of key concern for x86 server customers both now and in the future as workloads within the data center increase. 2. Consistency and stability of support:Customers have also consistently rated IBM’s phone support highly despite the ups and downs of the economy. IBM phone support consistently scored highly throughout the economic downturn in 2009, when many customers kept their servers for longer than expected, and also in the exuberance period that followed in 2010 as companies replaced their servers en masse. Now, as customer satisfaction rates have returned to more normal patterns, IBM continues to retain leadership in this and many othercategories. 3. Continuing to meet high customer expectations:System x’s consistent performance in meeting customer expectations over the past several quarters has led to increased expectations from its customers – setting the bar even higher for IBM. But despite having higher expectations than its rivals, IBM has continued to meet or exceed in most satisfaction categories in TBR’s study. 4. Server value:TBR believes that IBM’s innovations around areas such as memory capacity, server performance and virtualization is driving an ROI message that resonates with businesses – illustrated by higher-than-average customer server value satisfaction ratings over the past few quarters.3 TBR Whitepaper | May 2011 Technology Business Research Inc.
The path to Customer Satisfaction Over time, IBM has proven to be less susceptible to the recent ups and downs of overall customer satisfaction during period between the recession of 2009 – a time during whichaging server hardware was kept in service – and the significant upswing in server purchasing and customer satisfaction that followed in 2010. In 1Q11, as a period of normality returned to the industry and the exuberance of the previous year faded away, IBM took advantage of its foundation of satisfaction created in the previous quarters, while continuing to meet or exceed customer expectations, placing it ahead of Dell and HP in overall satisfaction in TBR’s 1Q11 server report. In addition, 1Q11 results set the stage for continued success for IBM in the coming quarters, with another round of purchasing expected on the heels of new server processor releases by Intel. TBR anticipates an upswing in customer satisfaction as IBM, Dell and HP roll out new systems based on the processor platforms. IBM’s consistency over the past six quarters bodes well for its performance in coming quarters, as participants in TBR’s study indicate intent to buy hundreds of x86 based servers – 125 each, on average – over the next 12 months.4 TBR Whitepaper | May 2011 Technology Business Research Inc.
IBM Breeds Performance, Reliability and Efficiency IBM outpaced its rivals in 1Q11 and the preceding five reporting periods by earning competitive strengths in hardware quality and reliability. Businesses are working to navigate a rapidly changing datacenter environment – with memory limitations, increasing complexities, and growing mission-critical workloads – and an environment in which IT budgets are flat, forcing IT staffs to increase the services they offer despite restrained resources.At the same time, x86 server users – the company divisions or lines of business that do the work – are seekingtechnologies and services that enable them to address the demands of specific workloads, ease the crunch of both limited resources and increasing complexity, and provide help as needed.TBR’s customer satisfaction study also has consistently found that energy efficiency, an adjunct to decreased power and cooling costs for the datacenters, is rising in importance. Energy efficiency and virtualization are areas where IBM has historically scored well. At the same time, companies are moving mission-critical workloads onto their x86 systems and seek simplified deployment through5 TBR Whitepaper | May 2011 Technology Business Research Inc.
virtualization.6 TBR Whitepaper | May 2011 Technology Business Research Inc.
IBM Has Built a Foundation of Consistency and Stability IBM has maintained a level of consistency that has enabled it to continue differentiating from rivals. Despite changes in the overall market, IBM has minimized changes in customer satisfaction, both during the dramatic cutback in IT spending during the economic turmoil of 2009, and during the enthusiastic buying spree that followed. Since mid-2010, server purchasing plans have settled into a more usual pattern of sustained spending. The exuberance of the post-recession hardware spending spree has ebbed to a more practical tone and, along with that change; customer satisfaction levels with all three vendors have receded.Yet IBM’s consistency, driven by phone support, hardware reliability and server delivery times, has kept System x on a level track. IBM earned the overall top position in TBR’s 1Q11 x86 Server report as its customer satisfaction rating jumped for the second consecutive quarter – outpacing HP and Dell. IBM scored its third consecutive competitive strength for high customer satisfaction related to on-time delivery. On-time delivery was less important than it was during the exuberant buying period in 2010,but the metric remained key to x86 system users. IBM’s consistency in this area position it well to meet increasing customer demand for on-time delivery in coming quarters as new iterations of its System x servers arrive. Finally IBM continued to lead its two7 TBR Whitepaper | May 2011 Technology Business Research Inc.
competitors in the area of server value in 1Q11. TBR believes that businesses sought lower TCO whenreplacing their servers in 2010, and will continue to do so in 2011. While refreshed portfolios from IBM,Dell and HP portend more spending, most respondents in TBR’s 1Q11 report said they would keep their2011 technology spending at 2010 levels. That puts server value solidly on IT departments’ checklists,which is an advantage for IBM, which scored significantly higher than itscompetitors.Despite High Customer Expectations, IBM Consistently Meets or Exceeds on SatisfactionIBM’s high scores have raised the expectations of its customers, who have grown accustomed to a highlypositive experience in dealing with the company. IBM, over the past several quarters, has successfullymet those expectations in almost every area within the TBR study, and 1Q11 was no different. TBRtabulates its Weighted Satisfaction Index (WSI) rating through an examination of customer expectationsand the vendor’s ability to meet those expectations. High expectations that haven’t been effectively met(i.e., low or moderate satisfaction) can negatively impact the score calculation. Alternatively, a high-expectation category with high satisfaction means an advantage for the vendor. In 1Q11, IBM wasawarded competitive strengths in phone support and on-time delivery and its WSI position held steady,illustrating continued dominance over competition.8 TBR Whitepaper | May 2011 Technology Business Research Inc.
IBM’s Customer Satisfaction Success is in the Ability to Meet the Right Expectations at the Right Time TBR believes that IBM’s continued success in our customer satisfaction study comes from its ability to understand customer needs and expectations and meet or exceed them. During the recession of 2009, when much of IT spending was cut back dramatically, IBM met customer demands at a much higher rate than its competitors thanks in part to its phone support. IBM was well-positioned when the market turned around and corporate IT spending increased in 2010, meeting expectations with its fifth-generation X-Architecture and the services built around it, by leveraging factors including performance, efficiency and delivery times. As spending patterns returned to normal in 4Q10 and 1Q11 and companies put their new servers into use, IBM has seen its customer satisfaction increase in such categories as phone support and on-time product delivery – areas of competitive strength for the company – as well as server value.TBR believes that IBM will continue along this path with consistent delivery of phone support, server performance and relative value even as new challenges will rear up in late 2011 and early 2012.9 TBR Whitepaper | May 2011 Technology Business Research Inc.
About the Studies TBR’s ongoing Corporate IT Buying Behavior & Customer Satisfaction Studies (published in four separate volumes each quarter covering Desktops, Notebooks, x86-based Servers and Service & Support) have been conducted since the first quarter of 1997. For vendors, distributors, large end-users and the investment community, this program has become the preeminent tactical tool for monitoring customer satisfaction from quarter to quarter. The 1Q11 study, published in May 2011, was based on the view of 499 x86 server decision-makers at midsized and large corporations in the United States and Canada, representing a total installed base of about 270,000 x86-based servers and purchase intent of 62,000 units during the next 12 months. About TBR TBR specializes in providing in-depth and timely insights within the computer, software, telecom, mobility and professional services industries. These critical insights can provide value to all levels of your organization: Executive, sales, marketing, product and business development, finance, procurement, and others. We deliver this intelligence in a format that is uniquely responsive and tailored to your needs, and we do so as an objective source, which allows you to look at the market from a fresh, impartial perspective.10 TBR Whitepaper | May 2011 Technology Business Research Inc. XSL03035-USEN-01