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

To: George W Daly, Jr. who wrote (4458)	1/21/1999 5:11:00 PM
From: Arrow Hd.	Read Replies (2) \| Respond to of 8218

Most S/390 processor complexes are part of large bids done on a bottom line basis. The bid includes all kinds of offerings including software and services. So hardware suffers price attrition to close the "total cost of computing" target. But when 60 percent more MIPs are shipped in mainframes and the software is charged for on a functional basis (the more processor MIPs the higher the software charge) then IBM receives additional software revenue at no additional cost. Not totally pure profit but as close as you can get. The key to focus on is 60% more MIPs shipped and these are still very profitable MIPs. Obviously, containing price attrition would be a better scenario but it is very competitive out there.

To: George W Daly, Jr. who wrote (4458)	1/21/1999 5:23:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 8218

George, When I was still working for IBM a couple years back you could see the trucks lined up across from my building loading up those S/390 boxes, and at the end of every quarter the story would be 'MIPS up, revenues flat to down'. It's been going on for a long time. It's pretty apparent that Wall Street has also not cared for some time, and is focusing on other areas, such as services and the internet angle. Several on this thread were hammering IBM for it's lack of revenue growth 100 points ago!!! Besides, your share profits should make up for any deficiency in variable pay. <gggg> Best regards, John