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IBM SAID TO BE BUYING UP SKYLINES TO INSTALL G5S.

According to a report by Technology News of America in its Infoperspectives newsletter, IBM is rumored to be so bent on replacing Hitachi Data System's Skyline mainframes that it is willing to buy the Skylines from customers and leasing companies who own them. The word on the street, says Tech News, is that IBM is going into Skyline shops and offering to take their machines in trade for new G5s on a MIPS-for-MIPS basis and is only charging customers for any extra MIPS they buy on their new G5s. Apparently, acquiring extra IBM G5 MIPS is a common occurrence as part of these deals and IBM is reportedly charging as little as $4,000 per MIPS for the incremental power. While industry analysts certainly thought IBM would have to offer aggressively low prices on 9672 G5 series mainframes to entice customers, few thought that IBM would actually end up buying Skylines outright to close deals. While IBM can say that it shipped large amounts of MIPS in the course of such deals, it is only charging for incremental MIPS and therefore doesn't make a lot of money on the deals. IBM's situation is further complicated by the fact that it now has possession of Skyline mainframes that are presumably too valuable to scrap but unsaleable to the 9672 customer base. (Perhaps they will end up at IBM Global Services and used in the $5bn outsourcing contracts Big Blue got from AT&T when Ma Bell bought IBM's Global Network earlier this week.) Such Skyline swap deals make great sense to customers because the G5s have lower maintenance and environmental costs. Hitachi Data Systems has refused to comment on the IBM rumors. Unconfirmed rumors also say that Comdisco, the largest lessor of Skyline equipment, has refused to play along with IBM thus far because IBM is unwilling to give it a piece of the action. For more details on this phenomenon, go to www.tech-news.com.
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Publication:Computergram International
Geographic Code:1USA
Date:Dec 14, 1998
Words:325
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