Chairman Akers’ rebellious republic down in the south-west has clearly wrung more concessions out of the Armonk Politburo than the hardliners will be happy with in the launch of the RISC System/6000, and as a result, the family has a much better chance of commercial success than seemed likely from any of the pre-announcement publicity and speculation. In every aspect except one, the line is exactly as all the pre-announcement leaks had led us to believe, but the one departure from the prepared script is crucial, and all the signs are that it was a very last-minute inclusion. That departure is of course the inclusion of an entry model at just $7,500.
Unix Fundamentalists
The entry price of a line like the RS/6000 is one of the most critical features, and with a bottom model that low, the line is vastly more competitive with the offerings from Sun Microsystems, DEC and Hewlett-Packard Co. Its inclusion will done nothing to endear the already alienated Minnesota republic – keeper of the AS/400 conscience – to its Texas siblings, and will not have gone down well in the enclave of the Mother Republic in New York State that looks after the 9370: although staged a week ahead as a pre-emptive strike against the RS/6000, the introduction of the 9371s already looks like a hollow and empty threat. And within the Texas Republic, the bottom end model threatens ethnic strife between the Unix Fundamentalists and the PS/2tians whose PS/2 Model 70 486 icon has been thoroughly vandalised by the pricing on the RS/6000 Powerstation 320, which, being able to be configured as a multi-user system also leaves the AS/Entry System 36 configurations looking mortally wounded. Strikingly, the New York Times last Monday, and the Wall Street Journal on the day of the launch on Thursday came out with big preview features on the new machines, and both suggested an entry price of $15,000 to $18,000, and highlighted this as a crucial competitive weakness against the super competive non-believing world outside the Armonk Empire. The most important thing is the entry-level price-point, International Data Corp’s Vicki Brown told the Wall Street Journal, believing it to be $15,000. This week’s Computer Systems News did not believe that there would be a low-end model before 1991, and the previous week, the New York Times suggested that the expected lack of a low-end model would discourage software developers from writing for the new machines in the belief that unit sales would be comparatively low, and that the size of the market for their software would thus be limited.
Knock-out blow
There is no question of the RS/6000s delivering a knock-out blow to the competition, but Sun, DEC et al are going to have to fight rather harder than they expected. Of course they all have their plans in place to meet the challenge of the RS/6000s. Sun is preparing a $5,000 Sparcstation entry for the summer, and overall plans to outdo IBM in price-performance. MIPS Computer Systems Inc is preparing to double its price-performance, and looks for the price-per-MIPS of RISC-based machines to fall 50% every 12 to 18 months. DEC will come out with DECstations with a version of the MIPS processor that powers its 18 MIPS model with a faster clock speed, and is expected to come out with a multiprocessor version of Ultrix Unix that will run a server built of up to four of the MIPS processors. Hewlett-Packard is ready with a cheaper, faster version of the HP9000 Model 800, and also has its 50MHz 68030 and its 68040 machines up its sleeve – indeed the arrival of IBM as a serious contender on the market looks more likely to expand the market faster than would otherwise have happened than to knock big holes in the profit and-loss accounts of its competitors. So. IBM has passed the first test with flying colours, scoring far more marks than any of the advance publicity had suggested – but it is only the first test. Can the Texas Republic throw off the yoke of IBM’s centrally-planned economy sufficiently to meet the next big test – that of renewing the product line with major improveme
nts every six months, completely obsolete it every 18 months? That is what its competitors are doing and that is what IBM has so far failed to do with the PS/2 – that line is doing much too well for IBM to want to shave margins and give anything away there: instead it holds a generous price umbrella over Compaq Computer Corp. But the Unix Fundamentalists will have to gain internal autonomy and disband the Armonkist party in their midst to keep their machines competitive – something they emphatically failed to do with the benighted RT.
Rebellious republic
The fact that they hold the chairman in such disrespect that they take his very face in vain and use it in a ray tracing demonstration that gradually builds up his physiognomy and then plays around with it (CI No 1,365) underlines the extent to which Armonk has lost control of its rebellious republic. But Akers knows that the hardliners and the dread army of the old Data Processing Division sales force have not been purged and are just waiting for an opportunity to depose him and restore the old order. By giving the Austin faction its head, he runs the grave risk – the Dow newswire was much nearer the truth than it imagined when it described the new machines as risk-based (CI No 1,366) – that the new line will, like bad money, drive out the good, replacing the high-quality earnings IBM makes from its proprietary systems with low-quality earnings from an vast base of machines sold on desperately thin margins. They’re already wondering on IBM’s Central Committee how long it will be before Chairman Akers has to send in the troops and quell the revolt on its southern border.
