It seems to me that a lot of people are in a pretty deep state of denial about the state of the mainframe business right now. Whether or not ISV software is the root of all evil, people still spend a lot of money on it. If the value was not there, economics says that competitors would come in and lower the price, or that a loss of demand would lower the price. Either way, prices are elastic and represent what the market will bear.
And there's the rub. The mainframe market is small enough that a lot of the people who are involved in it know each other on a first name basis. When a company contemplates creating a (mainframe) product they know that there are perhaps 10,000 potential customers. If you don't like that number, add or remove a few thousand. It doesn't materially alter the economics of this space. Software vendors are not charities and so they have to get, both development and operating cost recovery, as well as some profit from a market where most of the moderately successful products are going to have less than 1000 customers and an out-of-the-park home run will have only a few thousand takers. If you do the math you will see that such a market dictates high unit prices. There is no way around it. And if the software vendors go away, what happens to the market and the jobs (yours and ours) that depend on it? Now you can correctly and constructively argue that the software vendors aren't very efficient and that is surely reflected in profitability which is fairly low by US business standards. That has a bearing on pricing too, as does the fact that the mainframe software market is still carrying most of the burden for development of distributed products - most of which still are not profitable after all these years. But even allowing for all of that, unit prices are going to have to remain somewhat high or more companies will go out of business or be swallowed up. That much is fairly certain. CC ---------------------------------------------------------------------- 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
