And this much-needed turnaround happened in just five months.
IBM PSG is a worldwide provider of complete, networked personal computing solutions. IBM PSG offers a variety of products, solutions and services including IBM's mobile PCs, servers, desktop PCs, thin clients, options and emerging technologies to customers of all sizes. PSG offerings combine high-performance technologies with leading-edge quality, design, support and services. IBM Personal Systems products and services are available direct and through a worldwide network of authorized IBM Business Partners.
IBM PSG suffered a $1 billion loss in 1998, and close to a $500 million loss in 1999. To remain competitive, IBM decided upon a bold strategy to launch an entirely new brand of desktop computers (NetVista) under an initiative that would change the way PSG operates on a global basis (“Edge of Network”).
Based on IBM’s premise that the PC is no longer the nexus around which a business operates but rather one device of many that sits on the “Edge of Network” (EoN), this strategy was key to PSG’s resurgence in 2000 and served as the umbrella for the biggest product introduction year for IBM in over 20 years.
IBM created the NetVista PC with several key features in mind.
First, simplicity was key. The NetVista PC devices are designed to save desktop space and simplify computer use. Using leading-edge Universal Series Bus (USB) ports, the PCs have fewer cables and are smaller, making them easier to carry and set up. They are also designed for fast, high-bandwidth Internet access and overall simplified use. The PCs are new from the inside out with new drives, keyboards, and networking and security features.
Appearance and style were also important. IBM hired award-winning designer Richard Sapper to design the first NetVista. Famous for designing the first IBM ThinkPad, Sapper delivered a sleek, black matte design that drew immediate accolades for its functionality and stylish appearance.
The communications messages for the NetVista PC were tied into the four “pillars” of the EoN strategy:
- E-business ready
- End-user optimized
- Ease of use
- E-work style coordinated
For media outreach, Brodeur focused on a wide range of editors, both familiar and new to IBM. Expanding the normal outreach list six-fold, Brodeur reached out to editors from IT trades, national news outlets, local media in key geographies and a wide spectrum of vertical media.
After the extensive research that was conducted, IBM and Brodeur concluded that their objective was to communicate and demonstrate the new direction IBM was taking. This wasn’t about a new coat of paint on old PC designs, rather an exciting new series of desktop computers with a new look and features. Increase in sales and profits were also strong objectives, but successful outreach had to come first in order to increase sales.
The media’s perception of IBM’s PC business was negative following back-to-back financial losses. Also, the EoN and NetVista concepts were new to IBM and ran counter to previous messaging, leaving a wide area of exposure in the media. Furthermore, similar all-in-one designs had already been introduced by the competition, presenting IBM with the challenge to differentiate the NetVista line in comparison to well-received products from Compaq, Apple and HP.
Rather than simply launch EoN, both IBM and Brodeur Worldwide thought it would be best to explain the entire picture to the media over a gradual period of time – allowing for extended explanations of the EoN concept. There were many other products and services to follow, so if the media understood the bigger picture, they would be more apt to place the NetVista line in the desired context.
In the fall of 1999, Brodeur Worldwide and IBM PSG began an intensive outreach tied to launch EoN in relation to new NetVista products slated for introduction throughout 2000. Linked heavily to PSG’s return to profitability. IBM left old technology behind in order to create an entirely new brand, which would introduce new devices and new engineering. For IBM PSG, this was a whole new way of thinking about PCs and what they can do for their audience.
For the media’s first look at NetVista products, Brodeur and IBM kicked off a three-city, three-day tour to compress the launch duration so no single reporter had the lead “scoop.” During simultaneous interviews in New York, Boston and San Francisco, Brodeur and IBM took time to meet with individual reporters and analysts to personally explain the EoN strategy and how it fit into each of the new product introductions. Along with the NetVista PCs, leading-edge devices such as the IBM Wearable PC were shown to display the full range of the EoN umbrella.
These are the steps that were taken prior to the launch:
• In November 1999 Brodeur and IBM PSG began talking about EoN off-the-record, but didn’t provide specific information.
• In February 2000 IBM PSG and Brodeur conducted a one-on-one blitz across the country. Within three days, they met with approximately 50 reporters in New York, Boston and San Francisco. As a tease and to bring reporters to the table, they said they had news to share, but said nothing more. Turnout was excellent, resulting in well over 30 placements in less than 24 hours.
• On March 13, 2000 a release announcing NetVista’s official launch went out.
• In April 2000 more specifics were shared with reviewers during a product reviews tour.
• May 8, 2000 was the official launch for sale of the products.
Since the fall of 1999, IBM PSG has given the media a constant stream of information on the evolution of the EoN strategy, followed by carefully planned product introductions that culminated in the creation of the NetVista family. IBM introduced more products in 2000 than in the past 20 years.
Because of IBM PSG and Brodeur’s intensive media relations efforts, IBM PSG is back in the game. Media coverage of the new product line has been phenomenal, with very positive hits in diverse media such as The Wall Street Journal, Computer Reseller News, Federal Computer Week, PC Week and Popular Mechanics. Walt S. Mossberg of The Wall Street Journal called NetVista “Not only stylish and compact, bust fast and powerful as well,” and Joe Wilcox of CNET News.com said “Analysts forecast a big turnaround in IBM’s overall PC operations…”, and according to Karen Franse of VARBusiness the NetVista represents “A new way of thinking at Big Blue…”
Sales have increased and public perception of PSG changed from ambivalence to enthusiasm in just five months. At the same time, IBM changed the way it makes, sells and promotes its products. And most importantly, IBM PSG went from being grossly unprofitable to being profitable in Q1 and Q2 of 2000 to posting a profit of $65 million in Q3.