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Technology Stocks : IBM

IBM 309.71

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To: yard_man who wrote (3466)	7/13/1998 3:39:00 PM
From: Arrow Hd.	Read Replies (2) of 8218

Tippet, some comments in reply to your questions. Demand for mainframes has accelerated in the past few years for a number of reasons. I would say that IBM can rely on at least 30% growth per year measured in MIPs shipped from the factory. Used equipment put back on the market adds some more but is hard to measure. Demand is not revenue. Revenue is down due to price attrition. All IT industry sectors are prone to ecomomic downturns and would be categorized as "cyclical". Mainframe architectures allow for scalability and flexibility. Depending upon Internet traffic volumes you may have a full machine, or just an engine, or maybe a logical partition or in a Parallel Sysplex be able to spread the workload over multiple machines. As far as revenue, I dont have any numbers available now but I think overall hardware revenue was about 30 to 35 billion with mainframe revenue somewhere around 8 to 10 billion depending upon what you count. Services revenue is something like 25 Billion. The margins differ and mainframes still enjoy healthy margins due to the implementation of lower cost CMOS technology. Hope this helps.

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