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To: Dan3 who wrote (138555)	7/3/2001 9:09:15 AM
From: Mary Cluney	Read Replies (2) \| Respond to of 186894

Dan, <<<Third, when IBM gets $30 Billion in revenue from servers, it's something like $20 Billion in support contracts, $5 billion in software, and $5 Billion in hardware of which $2 billion is processors sold at a very high markup (to IBM) leaving about $0.7 Billion out of $30 for whoever makes the CPUs (mostly IBM for RS6000s, S390s, and AS400s)>>> Although your statements have some elements of truth, it is basically false and misleading. It does not pass the first level sanity check. First of all IBM bookkeeping is probably more honest than you allude to. They will not the credit the same revenue to more than one category of sales (I don't think). The server division will not get credit for software and services sales. Secondly, when the industry say they sell 4 million servers a year and that produces $60B in sales, I don't think they include other major items in hardware, software, and services into the sales number. 4 million servers at ASP of $15,000 is not a bad estimate. That, however, is only a guess on my part. If you have better estimates, please by all means share them with us. Mary