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To: Edwarda who wrote (135530)	7/5/1999 2:02:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Edwarda, back in the old days IBM used to give the software away "free of cost" -- you just needed to buy their mainframe. That was the cause of the anti-trust suit which eventually resulted in unbundling. Now, as you pointed out, the situation may be reversed -- they are looking at hardware as a means of selling software and services. You cited a perfect illustration of what I am talking about with regard to transfer pricing. IBM certainly didn't lose money on the software side by using that tactic, since the software "losses" could not be separated from the hardware profits. Many customers are looking for one-stop shopping. And vendors are always looking for opportunities for tie-in sales. That was the motivation behind Compaq's acquisition of Digital. That's why I think it is an error to focus on IBM's PC losses in a vacuum. TTFN, CTC