Think of all of the code within z/OS that actually depends upon device
geometry. The C and H in CCHHR, etc. A hallmark of z/OS has been
backward compatibility. If this code were to be changed, all of that
backward compatibility would go poof! For what benefit. Customers have
revolted against making massive changes to support "arbitrary" hardware
design changes.

Another reason is that back in the SLED days, every new device type had
a different geometry, and caused massive JCL changes to accommodate that
new geometry efficiently in terms of space utilization, and indirectly
$$$. 1/2 track block size (27998) on a 3390 (track length  56664)  will
waste about 40% of the available space if used on a 3380 (track length
47476).

That is the reason a few vendor products are still distributing
source/load modules with a approx. 6k block size, as opposed to 1/2
track blocking.  A 6k block size is fairly efficient (although
sub-optimal) on both 3380 and 3390. 

A secondary effect of the geometry issue is the reason for 3390-9, 27,
54,.... To get around some of the other limitations imposed by volume
limits arising from the basic 3390-3 configuration.
These other volume sizes are compatible with the CCHHR format of a
3390-3.

IBM has stated that future devices will be compatible with 3390 geometry
to prevent the need for mass JCL changes.

<snip>
That leads to a question that I've been thinking about for some time.
Since the 3390 geometry is emulated by modern storage control units,
why then are the inefficiencies of small blocks emulated also?  There
are not SLEDs actually storing the data, why are IBG's,  sectors,  and
all the other CKD nastiness emulated that makes 80 byte blocks such a
bad idea?   IOW, why can't the control unit  simply store  708 * 80 byte
blocks on a 56,664 byte 3390 track?   Does zos's calculations take these
inefficiencies into account and only write 78 of these blocks per track?

The "C" in CKD stands for "count" and this is some information about the
amount of data following in the next data block (the amount may vary
from block to block). Likewise "K" in CKD stands for "key" and some
access methods are using key data that is stored before the actual data.
So, both are bits of information that are used and thus cannot be
dropped.
</snip>

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