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To: JRI who wrote (53450)	3/15/1999 12:59:00 PM
From: rudedog	Respond to of 97611

I would have to go and read some of the DELL stuff to understand what they are talking about. Why would DELL be paying IBM 1%? For what? DELL uses exclusively INTEL designs even when they tweak the design work, and INTEL would not design in a royalty to IBM - if so then everyone using INTEL base technology would use it. BTW both IBM and INTEL pay CPQ for technology they license in the PC space. This has been a significant source of revenue to CPQ over the years. When INTEL introduces 8 way chipsets based on the Corellary Profusion architecture, the payments to CPQ will increase since CPQ contributed most of the I/O design under license. But users of the base technology do not pay CPQ - IBM and INTEL do. I'll have to go and see what this is about but it sure sounds like nonsense to me. DELL is not that stupid - in a business where every dollar counts, the idea of them giving a competitor $25 on every sale is just not credible.

To: JRI who wrote (53450)	3/15/1999 1:18:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 97611

Hi John, I just saw your post and Rudedog's response. I was not aware of the 1% until also reading it as the deal unfolded. Since I have not read anywhere exactly what the 1% covers, I have no idea what they pay it on. Patent cross licensing is pretty common in the industry, and the tech heavyweights benefit due to their large portfolios. Even in the chip wars, AMD licensed Intel designs. AMD is also using the Alpha high speed bus design in their next generation of PC chips. Again, in Dell's case it would be interesting to see exactly what in their boxes requires the IBM royalty. When I have time I'll check out IBM's financial statements looking for the royalty info, but I suspect that they don't split it out and just provide a total figure, so it will not be of any help here. John