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Technology Stocks : Intel Corporation (INTC)

INTC 35.94

+4.2%

12:13 PM EST

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To: Tony Viola who wrote (105353)	7/7/2000 10:46:30 PM
From: THE WATSONYOUTH	Read Replies (3) of 186894

Re: "I have no source of information about what they're doing, but have to wonder, unless there's something new under the sun in mainframes" This is from a retired IBMer (not me) who is now a senior exec. (CTO) at an IBM customer (S/390 shop) I think it explains the problem S/390 is facing and the solution. This is why those mainframe software companies are tanking. It's about time. "The only reason the S/390 is not doing GANGBUSTERs is MIPs based pricing by the S/390 Software Industry (CA, Compuware and BMC primarily). I recently upgraded my cpu by 100 MIPs. I paid approx 80K for the hardwae upgrade. It cost me approx 800K in extra charges for SW from those 3 vendors. I got NO extra value for that 800K, It is a TAX on doing more processing on the S/390. I recently had to make a decision on a major Data Warehouse initiative. It would require 200 MIPs. (less than 200K upgrade cost in HW). It would cost me 2.8M is MIPs tax. I chose to buy an RS/6000 S/80 plus SW for a total of 500K. If S/390 SW was priced like NT SW, the S/390 would be HANDS DOWN the cheapest and cheapest to run and FAR more manageable and reliable. Change the industry SW pricing model to usage based pricing and you would see the greatest resurgance of S/390 ever. I speak with my fellow CIOs regularly and we ALL see the same relative numbers. It is the 3rd party OS/390 SW pricing which is strangling the S/390. They seem not to know they are slowly killing their cash cow. TFL should have spent a small fraction of the stock buy back money in SWG breaking the monopoly and changing over to metered usage based pricing. Under that scenario the S/390 becomes the platform of choice for almost all new applications, if you already have one and the skill infrastructure. The Earnings growth would be miraculous. Unfortunately TFL does NOT understand the S/390 marketplace. I run the numbers all the time on the lowest cost computing platform for new apps. If I had an all BLUE system, the economics would favor the S/390 as IBM has reduced its MIPs tax to eliminate the dis-incentives." THE WATSONYOUTH

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