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Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: Robert Scott Diver who wrote (7421)	1/25/2002 2:06:12 PM
From: Arrow Hd.	Read Replies (1) \| Respond to of 8218

Today's announcement of Linux-only servers, including a mainframe model, is very interesting and should be a concern to Sun, among others. Since a Linux-only model results in no operating system's revenue the business model should be to not eat your own but to eat other's install base through a replacement strategy. A net-add business model works extremely well resulting in both gains in market share and revenues. To not eat your own, the machines probably have microcode that eliminates the ability to run any other operating system other than Linux. This then allows for a deeper discounting of the hardware since gaming the offerings by mixing and matching doesn't work. This combined reduction in the total cost of computing blows out the competition and yet protects IBM's existing hardware and software offerings at the higher end of the scale where OS/390 and other legacy software is still required. This is a significant announcement for IBM and gives them a robust family of offerings.