Re: ITJungle report on i5 pricing and marketing was: More COMMON

On 9/13/06, rob@xxxxxxxxx <rob@xxxxxxxxx> wrote:

CPU on demand is pretty cool.  But one does wonder about the economics of
already including the hardware at no additional cost, hoping to make
additional profit by people when they "activate" the process.

Actually, as the actual component costs fall, it makes better economic
sense.  It costs far less to include a component in initial install than to
pay someone to install it later at the customers site.  The determining
factor is whether the fraction of customers who do the upgrade later is
sufficient to overcome the added cost of the initially unused components.
Apparently, IBM thinks that enough customers will do an upgrade to justify
the additional up-front costs.

But IBM's done that for years. One Urban Legend is about the service rep

that stuck in a plain business card in a mainframe to make it run faster
while he was servicing it.

Sure.  As I understand it, every mainframe in the 60s and early 70s was
shipped loaded, and the purchased capabilities were enabled by the
installing engineers.