Don Williams writes: >Younger/smaller businesses have the option to use the less expensive open >systems, because they don't need the more powerful IBM mainframe.
Are they less expensive? Are they "open"? Do all of them not need a zEnterprise? >Like IBM's mainframes, each generation of open systems grow more powerful, has >more features, etc. So as those new businesses grow, they can expect their >open systems to grow with them. Can they? They have zero workloads requiring significant vertical scalability? >They may not need to go through the pain of migration to different platform. Or they may. >These companies may have a significant cost advantage over the older and >larger companies. Do they? There's no such thing as economies of scale? I can open a new bank and enjoy lower costs per transaction than Citibank, JPMC, and Wells Fargo? It's very rare that smaller, startup companies have cost advantages over larger incumbents. They may have other advantages related to quality, distinctiveness, disruptiveness, and other factors, but lower unit costs isn't typically one of their advantages. (Venture capitalists are well aware of that characteristic.) >Based on http://www.census.gov/econ/smallbus.html, there are around 28 >million businesses in the US. About 3/4 of those businesses have no payroll >(e.g., self-employed persons) and only account for 3.4% of business >receipts. This means that about 7 million businesses with a payroll produce >the US's GDP. Not quite. The public sector also contributes significantly to GDP -- government produces many goods and services (the "P" in GDP) -- so you have to account for that. >The Fortune 500 only produces 15% of the GDP. Really? Well, it depends how you count. Take a look at this: http://money.cnn.com/magazines/fortune/fortune500/world-economies-interactive/ The Fortune 500 actually produces the equivalent of 78.1% of U.S. GDP (2011). That's because most of them are global multinational companies. Which is a rather important detail in this story you're trying to tell. >Somewhere I read that on average Fortune 500 companies only remain on the >list for 75 years before being displaced. If that holds true, then in 75 >years, half of the current Fortune 500 may be replaced by companies that >are currently using open systems. It doesn't actually work that way. First of all, there's inflow, i.e. new mainframe customers, every year. (Yes, z/OS too.) I'm expecting this pace to increase, as a matter of fact, for a variety of structural market reasons. Second, the typical reason why companies enter or exit the Fortune 500 is because of corporate reorganizations: spinoffs, mergers, acquisitions, leveraged buyouts, etc., etc. Take a look at AT&T, for example, from 1983 to the present. AT&T alone has been responsible for a healthy percentage of "churn" within the Fortune 500. (As it happens there were several new mainframe customers born on January 1, 1984.) Third, there are many, many more indirect users of technology than direct ones, and that trend is only increasing. For example, practically every small business that launches needs a way to accept payments (credit cards, debit cards, etc.) How do they do that? Usually with a mainframe. Not an on premises mainframe, but sure enough their card terminal quite often talks to a mainframe, directly or indirectly. -------------------------------------------------------------------------------------------------------- Timothy Sipples GMU VCT Architect Executive (Based in Singapore) E-Mail: sipp...@sg.ibm.com ---------------------------------------------------------------------- For IBM-MAIN subscribe / signoff / archive access instructions, send email to lists...@listserv.ua.edu with the message: INFO IBM-MAIN
