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  1. Technology
December 2, 1991


By CBR Staff Writer

Word out of the UK market is that although IBM Corp’s sales of AS/400s are dismal, the installed base has been steadily rising this year, the reason being that IBM finds itself competing with imported used machines – and the UK is not the only market where the competition is a problem, writes Hesh Wiener. Seeking to control the situation, IBM has imposed more restrictive rules to govern the microcode AS/400 microcode. At present, IBM sells the processor with the microcode tape but dealers would subsequently move the microcode with the processor between machines: in future, microcode will be licensed to a specific processor and frame; the serial number of the processor boards and frame number must be supplied to IBM before a customer can use the microcode that enables the AS/400 to operate. This will not affect customers when they buy new or used machines from IBM but it will affect all customers when they sell their machines because it will reduce resale values. The new rules will also hurt leasing companies and used computer dealers, ultimately creating problems for AS/400 users that would like to buy or rent processors from independent agents. The rules have been applied retroactively to all AS/400s, but IBM’s ability to enforce the rules on systems it has already sold may be limited. Whenever a processor is upgraded or replaced by an independent company, that firm must write to IBM for a system-specific tape containing what IBM calls Model Unique Licensed Internal Code, which IBM will provide at no cost. The request for the tape must contain both the processor number and frame number. Any tapes for the AS/400 used before a processor replacement must be returned to IBM. Tapes for machines traded internationally are covered under the same rules, but instead of taking a few days to supply a correct tape, IBM will take three to six weeks, adding to dealers’ costs, which will have to be reflected in used prices. IBMers informally acknowledge the problems it faces with international traffic in used – and new – AS/400s, and may take other measures.

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