RE: Prometheus

Since he is almost totally in the p05 tier, it actually works to his advantage. 
The hardware cost is what is killing him.

Kendall Kinnear
Consulting System i5 Architect
Stonebridge

Phone: 214-676-3146
email:   kendall.kinnear@xxxxxxxx

Sent from Windows Mobile 5

-----Original Message-----
From: "Don" <dr2@xxxxxxxx>
To: "Midrange Systems Technical Discussion" <midrange-l@xxxxxxxxxxxx>
Sent: 6/1/06 7:35 PM
Subject: RE: Prometheus


Ken,

How much is "tiered pricing" killing him?

Don in DC

At 01:57 PM 6/1/2006 -0500, you wrote:

I know a business partner here that is buying used 150s and 170s,
refurbishing them, and selling them with his application because that's
the only way he can get to the price point to beat his competition. A
system equivalent to the System p Model 510 would be perfect for him.
What would it take to make that model available for System i? Obviously
the hardware development work has been done. So for some reason,
marketing isn't stepping up at the low end. Maybe IBM has decided to
take a pass on that portion of the market for System i.

Kendall Kinnear
System i5 Architect
Stonebridge

Direct Telephone Number: 972.419.7709
Or Toll Free:  800.776.9755 x7709
Cell Phone Number:  214-676-3146
Fax Number:  972.455.7260
Kendall.Kinnear@xxxxxxxx
http://www.SBTI.com/
If you are interested in iSeries and application development, follow
Angus' blog at http://www.angustheitchap.com/

-----Original Message-----
From: midrange-l-bounces@xxxxxxxxxxxx
[mailto:midrange-l-bounces@xxxxxxxxxxxx] On Behalf Of Booth Martin
Sent: Thursday, June 01, 2006 12:04 PM
To: Midrange Systems Technical Discussion
Subject: Re: Prometheus

I was talking with a fellow the other day that believes a national
company he knows will roll out 5,000 small i5's.  That is  a big number
in my opinion.  Adding in the impact of annual revenues for
subscriptions, renewals, natural growth, etc and this becomes a
significant revenue stream over many years.





Crump, Mike wrote:

There are a couple more thoughts to think of in this discussion:

1.)  Small is open to interpretation.  $4000 might not be much of

price

for a system and you might only make $400 on it.  But 10,000 of those
$400 dollar profits isn't such a small number.  Or 20,000......or
100,000.

2.)  You also need to consider TPOS - total profit of sale.  There are
all kinds of pricing schemes out there.  And companies have rational

for

how they do things that can always be justified.  But how often does
someone buy into a smaller machine and then upgrade or replace it in

the

future.....?  How many System i customers have not upgraded their
machine?  Added software, added hardware, added services,......  How
many companies start small and then grow over a period of time?

-----Original Message-----
From: midrange-l-bounces@xxxxxxxxxxxx
[mailto:midrange-l-bounces@xxxxxxxxxxxx] On Behalf Of Richter,Steve
Sent: Thursday, June 01, 2006 11:33 AM
To: Midrange Systems Technical Discussion
Subject: RE: Prometheus

why do people think there is no profit in p5 sized and marketed

systems?

let's review the profits of some of our competitors:

HP $1.7 billion the last quarter:
http://www.hp.com/hpinfo/investor/financials/quarters/2006/q2.html

Dell earned $762 million the last quarter:

http://money.cnn.com/services/tickerheadlines/for5/200605190858DOWJONESD

JONLINE000583_FORTUNE5.htm

-Steve


-----Original Message-----
From: Trevor Perry [mailto:tperry@xxxxxxxxxxxxxxxxxxxxx]
Sent: Thursday, June 01, 2006 10:56 AM
To: Midrange Systems Technical Discussion
Subject: Re: Prometheus


Larry,

I just realized. Steve does not understand "profit". Since it is going
to be
hard to teach him the equation of Sales-Costs=Profit, then we are

going

to
be unable to convince him that the System p is copied from the System

i

so
they can reduce the costs of p and one day make a profit.

Long live System i.
Trevor


----- Original Message -----
From: "Larry Bolhuis"
Subject: Re: Prometheus

I will cut to the conclusion and say the answer is to have i5/os as

a

supported OS on the p5 and do away with i5 hardware models, i5 only
business partners, a lot of i5 marketing. <snip>

To steal a line from Red October "You arrogant ass, you've killed

US!"

That is, kill all your i5 partners and you've killed the System i.

Many

of us (yes I am one of them) don't do p for a reason: we believe in

i.

Better instead to put more arrows in our quiver. With the hardware
essentially identical already why not let us sell more models?

There are not many published numbers to know for sure, but I dont
agree the p5 is a low profit item for IBM.  The $4000 for the lowest
price p5 is still $4000. AIX, Linux and software subscription are in
the $1000 range. DB2 brings in a good profit at $724 for the first
user, $124 for additional users or $4874 per processor. Double those
charges for DB2 on the enterprise ( bigger than 2 cores ) models.

Software monies go other places within IBM. $4000 for a small p

cannot

possibly make them significant margins and likely is a loss.

 - Larry

--
---------------------------------
Booth Martin
http://www.Martinvt.com
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