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March 17, 1987


By CBR Staff Writer

Now that DEC has IBM by the price-performance jugular it is not about to let the company go – but the Maynarder has a regrettable tendency to tunnel vision, to fixedly focussing on a single objective and leaving its flanks desperately exposed. In the early 1980s, the VAX-11/780 appeared to be selling so well that DEC devoted all its energies to enhancing the software and systems that fitted around it, and completely failed to notice until its was almost too late that Data General was coming up with a string new machines that made the price-performance of the 11/780 a very bad joke indeed. This time around, DEC is showing worrying signs of taking its resellers’ and OEM customers’ loyalty for granted, and imposing price structures and new restrictions that stretch that loyalty to the limit. IBM has not been slow to spot DEC’s exposed flank and – traditionally no slouch when it comes to battering its resellers over the head and kicking them in the teeth – it is pulling out all the stops to make itself appear Mr Nice Guy when compared with DEC. Computer Systems News hears that IBM is answering DEC reseller discounts that generally go no higher than 18% to 24% with some very juicy come-ons indeed on the 9370s for resellers. Discounts on the CPUs are thought to be in the 25% to 30% range, the machines are completely open to being packaged up with third party peripherals, and software licences on key products like VM/SP, Profs, Fortran and PL/I libraries are thought to go to 45% to 50%. There are also discounts of up to 35% on 9370s for in-house development and for demonstrations, and the IBM sales force is getting credits for reseller referrals. And in a further relaxation of the old, strict IBM rules on the 4300s, there will be no need to pre-specify a given level of purchases and having to refund IBM if the promised level is not met. IBM is expected to target the programme particularly at the factory and engineering markets that are dominated by DEC.

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