RE: IBM price increases -- MIDRANGE-L

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My understanding of upgrade pricing is more along the lines of the
trade-in concept and is based on some previous conversations with IBM.
The cost of an upgrade should approximately reflect the difference
between market value of your 'trade-in' and the market value of the
target platform.  The market value of the 7xx machines is determined in
the used marketplace while the market value of an 8xx machine is
probably IBM list.  Thus it makes sense that the cost of an upgrade
would increase as the value of a used 7xx machine declines.

If this were not the case, then it would become cost effective for us to
purchase a used 7xx machine and then purchase an upgrade to an 8xx
machine, for a total price significantly less than an 8xx machine
purchased new.

It is worth looking at the various incentives which are out there.  When
IBM really wants to encourage us to move to a particular platform, they
put out some programs for both customers and business partners to move
us in that direction.

Regards,
Andy Nolen-Parkhouse

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