-----Original Message-----
From: midrange-l-admin@midrange.com
[mailto:midrange-l-admin@midrange.com]On Behalf Of thomas@inorbit.com
Sent: Saturday, January 26, 2002 12:38 AM
To: midrange-l@midrange.com

>It's hard to imagine IBM foregoing a big bunch of profit from MVS (or z/OS
> whatever) by offering Linux in its place. I suspect that the profit
> margin is reasonably similar and that the price difference reflects some
> actual costs, perhaps costs of ongoing maintenance and enhancement. Those
> costs might drop significantly with Linux allowing lower price per server.


I dont know the numbers, but it looks like IBM makes more and more of its
money on consulting, out sourcing, and other computer services. If that is
true, then the hardware and even the OS becomes a loss leader. They can sell
the box at cost and then make money month after month staffing the computer
center, leasing the applications that run on the system, hosting your web
site, plugging your system into their communication network ...

The bad news for the as400 in this scenario is that IBM can sell much more
of these after market services if the box was a Linux mainframe then if it
was an iSeries. So IBM has more of an incentive to sell the Linux box than
an iSeries system.

Steve Richter




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