RE: Buying 170 - What's it worth, what's it missing?

["Andy Nolen-Parkhouse" <aparkhouse@xxxxxxxxx>]

> Subject: RE: Buying 170 - What's it worth, what's it missing?
>
> this explains to me why ibm offers the decent trade in deals.  It gets
the
> software, which retains its value, off the market.
>
> -Steve Richter

I'm not sure I agree with this logic Steve.  There are three things you
can do with your old hardware.  If it is very old and there are no
incentive programs for that model, you must dispose of the old machine
yourself.  If it is moderately old, then occasionally IBM has trade-in
programs where you get a discount for returning your old hardware.  For
recent models, you 'upgrade' your hardware and maintain your serial
number.

In all three cases above, software licenses can be transferred to your
new hardware.  It is only when a company discontinues use of a machine,
either by moving to a new platform or consolidating multiple AS/400's
onto a single machine, that software licenses would become available on
the market.

I don't think that aftermarket sale of software is really on IBM's radar
at all.  I definitely could be wrong, but I don't see many occasions
where the software would come on the market.

The start of this thread is based upon server consolidation.  Assuming
the licenses can be transferred to a third party; the software may have
more value than the hardware.  I would put the market value of the
software at:

(List price at P10 processor tier) minus (a standard 20% discount) minus
(the cost of a one-year software subscription to bring the code up to
current release)

I don't have the time to do the math, but I think it could be rather
high relative to the cost of the hardware on the market.

Regards,
Andy Nolen-Parkhouse