To all If you go down to page 56 of the same filing the software revenue details does provide an interesting note that is not backed up by figures anywhere -- software had a 26.4% margin pre-tax. Now that would be your net margin.
Like Wayne pointed out as well -- that is for all software, not just "z". I have found no detail of software by platform that would allow anyone to ascertain how much IBM makes in the "z" marketplace. One possible indicator of that revenue is on page 51 -- at the end of September 2006 IBM had surpassed 10 million MIPS of installed inventory. Forget about whether MIPS means anything or not and realize that IBM has a large install base of "z" machines. Let's hypothesize for a minute (that means don't believe any of these numbers because they did not come from the filing) and say that IBM has 1,000,000 MSUs of z/OS installed and charges $200 per MSU per month. That comes out to 200 million dollars a month for the base operating system. 2.4 billion a year will pay for a large sales, support and development staff with more that 26.4% pre-tax margins. I wonder what this would look like if you added CICS, DB2 and IMS to the mix. I have been in the software business and it is a lucrative business. It makes me wonder why IBM would not want more machines in the marketplace running "z" software so these numbers would look even bigger. Tom Moulder -----Original Message----- From: IBM Mainframe Discussion List [mailto:[EMAIL PROTECTED] On Behalf Of Wayne Driscoll Sent: Friday, December 22, 2006 11:05 PM To: [email protected] Subject: Re: IBM sues maker of Intel-based Mainframe clones Phil, This seems to be a bit of a stretch. In your original statement about 85% profit margin, you said "With a gross margin on mainframe software around 85%, surely IBM would fall over its own feet if another supplier were to promote z/Architecture in a credible way to new accounts and expand the zArchitecture installed base." Now to backup this claim, you point to IBM's corporate SEC filingm which states that the Gross Profit Margin for ALL IBM software, not mainframe software, was 84.6%. Please provide some proof behind the claim that "mainframe software" has an 85% profit margin! Wayne Driscoll Product Developer JME Software LLC NOTE: All opinions are strictly my own. ---------------------------------------------------------------------- For IBM-MAIN subscribe / signoff / archive access instructions, send email to [EMAIL PROTECTED] with the message: GET IBM-MAIN INFO Search the archives at http://bama.ua.edu/archives/ibm-main.html
