From: furballs@sequent.com (Paul Penrod)
Subject: Re: Future of OS/2 and IBM????????????
Organization: Sequent Computer Systems, Inc.
Date: Fri, 18 Dec 92 03:59:26 GMT

In article <1992Dec16.152535.12204@jupiter.sun.csd.unb.ca> hwhalen@jupiter.sun.csd.unb.ca (Hugh Whalen) writes:
>In article <1992Dec16.072137.28867@sequent.com> furballs@sequent.com (Paul Penrod) writes:
>>In article <1992Dec15.210437.934@gn.ecn.purdue.edu> ashwath@gn.ecn.purdue.edu (Ashwath Ram) writes:
>
>[Stuff about IBM laying off 25,000 people deleted]
>
>>
>>I think it would be prudent to ask the question as to where the
>>cuts are coming from. Remember, IBM has started decentralizing it's
>>busineses and while the PC products Division may be going great
>>guns, their mainframe division may be suffering terribly, so you
>>might find the cuts coming from a source that has little to no
>>impact on the product (OS/2) that you are currently using. Also,
>>IBM is among the most conservative of the blue chip stock companies
>>and has long earned it's reputation as a stable commodity in the
>
>Ahem .... stable? I believe that around 1987 IBM stock was trading at 
>approximately $178 per share. Yesterday it was trading at $56 per 
>share. God help us if this is stability. :) 
>

Yes, stable. You obviously don't play the stock market with
professional investors or you would realize that stock price is not
relavent, unless you are going short term. DIVIDENDS are the
stability. And, IBM earned it's BLUE CHIP status by producing
DIVIDENDS that are, up till now, consistently better than the
average.

>>volatile stock market. This implies that they have planned for this 
>>and are trimming the fat from the company to be come more 
>>competative. 
>> 
>>While the numbers are gargantuan as compared to someone like 
>>Borland or Microsoft, it represents a much smaller percentage of 
>>IBM as a whole than Microsoft. I would not worry about OS/2 support 
>>suffering. Right now, it's becoming a cash cow for them and they
>                                       ^^^^^^^^ 
>
>Cash cow? I don't think so. The most optimistic numbers I've heard are 
>2 million units sold. Lots went out at what ....$49. Others have gone 
>to retail outlets and since the retail outlets have to make a profit 
>the full price of these units did not go to IBM. Subtract costs for 
>disks, manuals, suppport!!!!, bug fixes!!!!, shipping, order taking, 
>advertising, beta testing, etc. and there is no way that this product 
>*at this time* is a cash cow. If IBM got an average of $50 per unit 
>sold then they received at most $100,000,000  from OS/2 sales. This is 
>not much in a company that has over $50,000,000,000 in sales. It is at 
>most .2% of their sales.
>
Think again. IBM makes a large portion of it's money on hardware
and service. They could give away the OS for all intents and
purposes, so long as they get the service contracts and sell
hardware. That's why their called International Business MACHINES.

>
>>have announced plans to integrate it into their other system
>>platform. As long as people continue to buy OS/2, IBM will continue
>>to promote it's growth and useability.
>
>Maybe, in fact, probably .... but more as a matter of strategy and ego 
>rather than the dubious fact that it's a cash cow.
>

Old marketing strategy they never teach in college:

"I'll give you the razor, so long as I can sell you the blades..."

One last thing. According to the sattelite news service, IBM is
having problems producing enough OS/2 packages to sell and bundle
with their PS/2 hardware, which is selling a record clip. Yes, I
would call that a cash cow.

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