Richard Chang wrote:
You are right when you said that these big companies sell their stuff at
a huge discount, atleast initially,is what I know.
Here in India, where I live and work, IBM had, 3-4 yrs back, sold a BG/L
for way less than anything, virtually at the price of a normal cluster.
This was done to cut out the competition and to boast about their system
being sold i.e, the first ever BG/L being sold in India. The
competition, as expected, was very livid that could IBM give it off at
such throw away prices.
... we (in the business) call that "buying the business". You literally
pay your customer to take your system. It doesn't take many of these to
get senior execs asking where the profit is. That is, if you look at
this as an investment, what is the return on this investment?
My argument is that the return is nearly to identically zero. My
rationale for this argument comes from the fact that once a customer
learns that someone else got a great deal, they also demand a similar
deal. This is the segue to the NDA bit earlier. So, unless you hide
the details of your sale, your margins will be impacted on nearly every
sale.
Does prestige translate into increased revenue? Lets ask on this list
(self selecting, probably not statistically valid, but may give a rough
picture):
Question for the list members whom have bought (large-ish) clusters/HPC
systems: Was your selection influenced by the heroic class systems
sales? Did you purposefully buy from the same vendor because of this,
or was this a significant contributing factor in your decision process?
Feel free to answer offline and anonymously if you'd like (I'll post the
question on http://scalability.org as well ... not a commercial site, no
adverts there, and we already have quite a bit of daily traffic ... no
astroturfing going on here).
Did IBM make a profit, I doubt it. Its another matter that this prestige
didn't give them enough mileage. It didn't start selling BG/L s like hot
cakes. It certainly gave them a boasting ground.
Thats my point. Prestige doesn't normally translate into sales.
Prestige gives you something to talk about, over that $4 USD cup of
coffee from Starbucks.
Put another way, who won the various races over the wilderness isn't
likely to influence many SUV buyers as to whether they should pick a
particular brand. Prestige is a talking point ... something like "hey,
did you know ..."
The subsequent quotes were very high that they couldn't win the
contracts. I was once told by a reseller that IBM's higher-ups decided
against further discounts(they will need to start making money). :-)
Yeah ... this happens. If you start buying the business (won't mention
any vendor names here), pretty soon you reach a point where a senior VP
or the CEO looks at the profit and loss for each division/group, and
notices one little one ... these HPC folks ... are bleeding capital.
Unless that bleeding (also called 'investment' above in a somewhat
semi-euphemistic manner) can be turned around (also called 'return on
investment' above in a somewhat semi-euphemistic manner), and they can
start showing a profit, that exec is going to think twice about
continuing that line of business.
So, the point here is that though prestige is ! = profit, it surely
helps their reputation.
Absolutely.
If Prentis and his team at IAS bought a huge storage cluster at a very
low margin from us, it wouldn't likely translate to a sale somewhere
else, even if we could use IAS's name (we couldn't). The prestige is a
badge of honor, not a sales tool.
Richard.
Joe
--
Joseph Landman, Ph.D
Founder and CEO
Scalable Informatics, Inc.
email: land...@scalableinformatics.com
web : http://scalableinformatics.com
http://scalableinformatics.com/jackrabbit
phone: +1 734 786 8423 x121
fax : +1 866 888 3112
cell : +1 734 612 4615
_______________________________________________
Beowulf mailing list, Beowulf@beowulf.org sponsored by Penguin Computing
To change your subscription (digest mode or unsubscribe) visit
http://www.beowulf.org/mailman/listinfo/beowulf
