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To: bhagavathi who wrote (104697)	6/21/2000 11:12:00 AM
From: rudedog	Respond to of 186894

Mula - To understand the investment model, you need to compare Alpha with SPARC, not with Intel processors. Alpha does about the same volume as Sparc. I don't know about PowerPC but I suspect those volumes are also not large. The reason that folks like CPQ, and SUNW invest in those low-volume proprietary architectures is to maintain specific features for use in certain high end markets. When you look at the margins in those product lines, which exceed 70%, you can justify a much larger R&D investment. Remember that each of these product lines also has its own OS - 2 in the case of CPQ. There are something like 5000 applications for the Alpha architecture, many of them highly specialized for specific markets in which Alpha has almost no competition. Users of those applications tend to be very loyal and have the attitude "if it ain't broke, don't fix it". OpenVMS still generates billions of revenue for CPQ, 10 years after the mainstream shifted to other alternatives. The ability to expand existing systems, 99.99 or better uptime, the best clustering in the business -after all, DEC was the first to do serious clustering and dominated that architecture - Oracle OPS was written to run on VAX Clusters and most of the work in cluster file systems, distributed lock management and versioned file access was done for those systems. So in the overall scheme of things, the processor development cost is relatively unimportant. As long as the Tandem and Alpha businesses continue to generate significant revenue, there will be good business justification to continue Alpha development. As far as Wall Street accounts and Tandem - Tandem sales have been steadily increasing. In other areas, DELL runs much of their JIT system on Tandem. Companies like AOL are doubling their investment in Tandem gear annually. There is just nothing else on the market that can deliver 99.9999% availability. But still, CPQ surely would look for any opportunity to get synergy between their volume engineering and this high end work. That's why I think they would do as much common development of systems infrastructure as possible. But I doubt that there is any pressure to stop Alpha development - it is a cash cow.

To: bhagavathi who wrote (104697)	6/22/2000 12:42:00 AM
From: Paul Engel	Read Replies (2) \| Respond to of 186894

Mula - Re: "My guess will be cpq will hold on and push the alpha design for a few more years to prove to their stock holders that they made a good decision in paying all that money for the DEC purchase (alpha rights)." This is probably correct. Compaq may also "convince" Samsung/API to buy the Alpha architecture for some nominal amount, and exit gracefully. It will be intriguing at the end of 2001 to see if Compaq - by then supporting TWO 64 bit architectures (ITanium and Alpha) - ignores a third 64 bit architecture - AMD's SludgeHumper. Paul