RE: More anti-midrange propaganda

["jt" <jt@xxxxxx>]

Just taking break from work, and in rare disagreement with Joe, I don't find
IBM's strategy stupid.  For one thing, IBM moves in the direction the market
wants, and where the market is willing to give them profitable revenue.  And
I'd be willing to bet that the hardware side of things (the Server Group)
sure IS making money.  Bob C. said 2 1/2 years ago that i and z profits were
subsidizing p and xSeries, and I believed that at the time and doubt (and
seen no indications) that it's changed much since then.  But overall they
likely make profits on the hardware, all 4 Divisions included.

No doubt Server Group helps drive up profits for other Groups like IGS
(Services Group) and Software Group.  As well as profits for the
Microelectronics Group, being an internal customer... Not to mention support
revenues (and presumably profits) the Server Group is getting itself.
Services is making a profit, but I just don't think that it's enough to
support below-cost hardware.

I believe it's possible that the marketspace will eventually focus more on
TCO, and then prices of i and z hardware will go down and prices of support
will go up and budgets will increase for services, roughly in proportion...
Just my wild-hair guess..  And that's IF the market (including IBM itself)
starts focusing on TCO, quality, and customer goodwill, as opposed to
looking in terms of /how to save a quick buck/ by the expediency of
off-shoring most (if not all) labor costs.

(Btw, I'm not gonna get involved in a long debate on this last point.  Will
say I'm not at all against the middle-class spreading globally, because IMO
that's what necessary to bring WWIII to a close and prevent WWIV...  But
companies willing to provide poor quality and hurt customer goodwill by
going way overboard on outsourcing...  Well I agree with what Joe and Don
said in earlier post, and "This is inevitably bad business." and "Give a
customer what they really need, it will pay off at the end."

| -----Original Message-----
| [mailto:midrange-l-bounces@xxxxxxxxxxxx]On Behalf Of Joe Pluta

| What's REALLY stupid about this is that IBM is trying to move from a
| hard-goods to a service posture.  This shows an extreme lack of business
| savvy, since the client may get the box then outsource the services, and
| then IBM gets diddly squat.