RE: Fast400 Value to iSeries community is less than zero -- MIDRANGE-L

Jim,

Thanks for your views.  I'm not contradicting any of the facts that you've
stated.  But, as I've said, it's more a question of POV.  See inline.

jt


"Have a GREAT day...!  And a BETTER ONE TOMORROW~~~:-)" (sm)



> -----Original Message-----
> From: midrange-l-admin@midrange.com
> [mailto:midrange-l-admin@midrange.com]On Behalf Of Jim Langston
> Sent: Friday, November 09, 2001 12:22 PM
> To: 'midrange-l@midrange.com'
> Subject: RE: Fast400 Value to iSeries community is less than zero
>
>
> I think the CINT govenor itself is what irritates people.
>
> I'm sure a lot of people, including myself, see it as IBM not giving
> us the best they can give us for our money.  It cost IBM so much
> to make the hardware, that is a fixed cost.  It costs IBM the same
> amount of money in hardware to give us a box with a certain rating
> as it does some other company without limitation.

True, but it's no different than the way software is priced by tier.


>
> So, when IBM sticks in a govenor limiting the amount of hardware
> we can use, people see it as a betrayal from IBM.  IBM is not giving
> us the best they can give us for our dollars, but what IBM wants to
> give us for our dollars.  We realize then, that if IBM wanted, perhaps
> they could give us twice the processing power with no problem in the
> same box, the only reason they aren't is because of the almighty
> dollar.

True again.  But that is the law of "price what the market can bear", which
up to this point has been the fundamental nature of capitalism.


>
> Well, heck with that, lets switch to a PC solution where we get the
> best we can for our dollar, because if company A doesn't give it to
> us, they know company B will.

There is always that option.  But I believe that, as more companies do that
and 400 profits shrink, IBM will adjust the price/performance in reaction.


>
> PC power is limited by current technology.  It takes a manufactuer
> so much money to develop and produce a PC.  And they add their profit
> onto that, and that's what we buy.  We can buy a $600 computer, a $1200
> computer, a $2500 server or go hog wild and buy a $5000 server, and we
> know that's the best we can get for our dollar.

Well.. this is true.  But what you've described is PC hardware is a
commodity, and Server hardware is not.  Those PC companies aren't making
pricing decisions based on altruism, they just face different market
pressures.  And they more than make up for it (or attempt to) in volume.
Buried in the cost of most of that money is the cost of Windoze.  Can
anybody seriously believe that M$ isn't out there for the almighty
dollar...?!?  The cost is hidden, so it's not all that apparent.  But the
fact that, at one time, the 3 richest men on the globe came from this one
company, I think speaks for itself.

The 400 doesn't work in a market with that kind of volume.

Now, IBM looks to the future, and sees the Server market heading in that
direction.  They also see their Software lunch getting eaten by the OSS
thugs.  So a year ago, both Mr. Gerstner and Mr. Palimisano announced that
IBM's vision of the future is that all computing will become a commodity.
It will become a utility, much like phone service is today.  So IBM intends
to become one of the dozen or so major computer utility providers.  Seems
pretty futuristic, and may not turn out that way at all...  But if you look
at the trends, it makes some sense.  I think it will be further down the
road that what they think, but who knows for sure...?


>
> With IBM, we pay so much money, and we get... what?  Not the best we
> can get for our money for sure, there's this govenor artificially
> limiting the hardware.  So apparently it's the best IBM *thinks* we
> should be getting for our dollar.  Okay, so we could get unlimited
> use of the CPU by paying more but.. you know?  I bet this still isn't
> the best we could of got.  I bet IBM coulda spent the exact same
> amount of money and make this machine twice as fast, but the only
> reason they didn't is because they're stingy SOBs.

This is the perception of many, no doubt.  But as Nathan said, it's a PR
problem.  The market defines the price, as much or more so, than IBM.

It's sort of like the issue of civilians getting killed in Afghanistan.  Is
it because the USG is bombing, or is it because the terrorists are hiding
amongst the civilians.  It is obviously due to both conditions.  If either
one wasn't true, civilians wouldn't be getting killed.  Now whether the
bombing is justified, depends on which side of the issue you start from,
more than anything else.

Similar to the issue of CFINT...

I personally agree with Chris.  I want IBM to have the dollars to put back
in R & D for the iSeries and the rest of their platforms.  I have faith that
IBM holds to industry-standard ratios of R & D money to investor payback.  I
don't know the numbers, but my guess is they probably have a much higher
ratio of R & D expenditures than most companies, because they've pioneered
in turning R & D to a marketable asset.  For the time being anyway,
intellectual property is marketable and has a high margin, and AFAIK that
money is (partially) being plowed back into the Server Group.

If IBM strictly made decisions based on ROI, they might not make any
computers, and consentrate on intellectual property and ISG for all their
revenue.  Intellectual property may not be around for long, though, so maybe
that's why they still manufacture computers...


Contrast all the above with M$, at the one extreme, and the FSF/OSI
Community at the other...



>
> That's what ticks people off about the govenor.  No wonder the AS/400,
> er, e-series, um iserver? is a one pony show.
>
> Regards,
>
> Jim Langston


Likewise, regards...!  Thanks again for the reply.