On Tue, 30 Jun 2009 16:12:59 -0500, Dave Day wrote: > If IBM's current mainframe revenue stream was to dwindle >to one twentieth of its current, how long do you think we >would continue to see the improvements we have seen in both >harware and software in recent years? Just to maintain >current revenue, they would have to increase market share >twenty fold. Estimates are that there are somewhere >between 6 and 10 thousand z/OS shops, worldwide. Taking >the smaller number, do you actually think z/SO could grow to >120,000 paying installations?
Allowing small mainframe shops to run on hardware such as Roger mentioned would not equate to IBM getting 5% of their current revenue. For one thing, small machines such as this would not suffice for large shops. For another, the software charges for running OS/390 on the machine that the OP is currently running are, based upon Timothy's post, $16,260 per month. How much does it matter that the hardware can be purchased for $5,000 rather than for $100,000? IBM mainframe market share has been dwindling for 20 years, during which time the need for servers has increased dramatically. This happened because the mainframe is perceived as too expensive. That perception came about because of the cost of software. In the old days, the pricing model was simple, both for hardware and software. As the compute power increased, the price increased proportionately. That, by the way is the reason that Amdahl computers came to be. Dr. Amdahl presented his design to IBM, who rejected it because, based upon their price/performance curve, they figured that they would have to charge $10 million for it, and they wouldn't be able to sell enough of them. Amdahl said that he thought they could make a profit at $4 Million, but his idea was rejected. When IBM started charging for software, the pricing curve was very nearly linear. It remained that way for many years. Every few years, shops would buy a new computer with about double the power of the one that they had before. It would cost about the same as the last one that they bought, and the cost for the software doubled. It didn't take many cycles of this for people to notice that the price of software was increasing rapidly. Computer billing departments had similar charging algorithms. Where I worked in the '70s, every time a new computer was purchased, they had a set of billing benchmarks that were run and the rate per CPU minute was adjusted so that users paid about the same price for the work done on the new computer as they did on the old one. It seemed to make sense at the time, but the charges soon became unreasonable as the faster computers became available for similar prices. So, mainframe market share has been decreasing for many years. IBM, to their credit, has reduced the charges for software, but IMO, not nearly quickly enough. Over the last ten years or so, the cost of the operating system has fallen to about a quarter of what it was. So, again, based upon Tim's post, it is now $4,403 per month for similar sized hardware. In that same time frame, the processing power of the high end mainframe has increased 20 fold. I know one shop that had 10 of the largest available mainframes in one site 30 years ago. Over the years, as their computing needs grew, they tended to put new workload on other platforms because of the cost, perceived or actual. Now they have one mainframe in each site. If IBM had changed its pricing model 30 years ago, I have no doubt that the number of mainframe shops would have grown with the rest of the industry. There could easily be 100 times as many mainframe shops as there are today. Instead, every few months we hear about another shop that has migrated off of the mainframe. > > I'm not a fan of IBM's current pricing strategy, as I do feel >it is way to complicated, and overpriced. But 1/20th of the >current revenue? I think we would all be taking in each >other's wash to find work. They could not stay in the business. >My .02, for what its worth. -- Tom Marchant ---------------------------------------------------------------------- For IBM-MAIN subscribe / signoff / archive access instructions, send email to lists...@bama.ua.edu with the message: GET IBM-MAIN INFO Search the archives at http://bama.ua.edu/archives/ibm-main.html
