Re: OpenVMS Seminar in Toronto (2005-02-24) a few points

From: David J Dachtera (djesys.nospam_at_comcast.net)
Date: 02/28/05 

Date: Sun, 27 Feb 2005 21:09:00 -0600

Robert Deininger wrote:
> Your comments seem particularly
> naive.

Well, in that case, I'll have to challenge you.

> In article <112288g53rmok75@corp.supernews.com>, Dave Froble
> <davef@tsoft-inc.com> wrote:
>
> >Robert Deininger wrote:
> >> In article <4IadnW7fT-L9O73fRVn-tA@igs.net>, "John Smith" <a@nonymous.com>
> >> wrote:
> >>
> >> ...
> >>
> >>
> >>>>>The last day for ordering an Alpha system from HP will be 2006-09-30
> >>>>>with last ship day to be 2006-12-31.
> >>>>
> >>>>Will HP make a big splash and cast this in stone, or is this a trial
> >>>>balloon ? If VMS sales are growing, this would mean that Alpha sales
> >>>>are growing and there should be no reason to can the product that has
> >>>>no more development costs to it. HP/Compaq hadv long and often stated
> >>>>that they would sell alphas as long as demand warranted it.
> >>>
> >>>1) Alpha performance only has one direction to go vs. Itanic at this point -
> >>>down.
> >>>2) HP will ensure that new Alpha's remain more expensive than IA64.
> >>
> >>
> >> Since Alpha servers are quite a lot more expensive to build than
> >> Integrity, that seems reasonable. I suppose HP could cut the price of
> >> Alpha systems and sell them at a loss, and undercut IA64 that way. I
> >> can't think of a good reason to do so off the top of my head.
> >>
> >> ...
> >
> >You've been singing this song for a while now, with never any details.
>
> First, I don't sing. Ever.
>
> I think it should be fairly obvious that cost details are proprietary, and
> it is no accident that I omit them. Ok?

Hhmmm... Proprietary costs? Does HP print its own money? ;-)

> >The way I see it, if the development is done, and it's just cranking out
> >more boxes, it's justifiable to question your claim. What part(s) is
> >causing the cost to be more?
> >
> >Enclosures? the tooling is in place, and steel is steel.
>
> Do you design and buy many enclosures? Do you have any idea how many
> details can be added or left out in a "simple" enclosure?

I should think all of them. Build one basic enclosure, and add elements
to order if, as you say, these are "low volume" products. To me, "low
volume" products are one-offs. Guess it depends on the observer's
perspective.

> The details all
> cost money. Steel is NOT just steel, and plastic is NOT just plastic. A
> change in color scheme costs significant design money, for example.

Really? How many times does paint for steel have to be re-designed? How
'bout color additives for plastics? I doubt there's much difference
beyond the obvious subtlties from one lot to the next. No additional
costs there.

> >CPUs? Ok, what's the cost of an Alpha CPU, and an itanic, to HP?
>
> Yeah, like I'm going to post that here. The difference is BIG.

I think he meant the delta from one production run to the next (same
spec.'s, same quantity per run, same etc.).

> >Disks? No possible difference.
>
> Disks are the same. The two styles of front-loading, hot-swap
> storageworks bricks are quite different, and I expect the costs are quite
> different as well.

I didn't think the old-style SBBs (for BA35x shelf) were being made
anymore.

As to the Compaq-style disks, should only differ in power dissipation,
capacity, transfer-rate, spindle speed, etc. as technology advances.
Nothing unexpected there.

> >Motherboard and components? They're all in production, just keep producing.
>
> Yup, that's easy. Just sign the checks to all the suppliers.

hp *IS* making enough off sales to make more product to sell, right?

(I know I say they act like they flunked out of business school, but the
implication in your statement could send hp's stock to bottom of the
Marianas Trench in pretty short order!)

> Have you
> designed and bought many high-performance circuit boards lately?

Again, how many times to these have to be redesigned? What worked for
one lot should work for the next, bug-for-bug. No additional costs
there, either.

> This is
> an area where lots of tradeoffs are possible. Added costs accumulate
> pretty fast.

Please elucidate. I don't come up with any "added costs", unless you're
talking about products not currently in production (which do not relate
to this discussion).

> >Memory? Another commodity. And IA64 seems to require more.
>
> Memory chips are pretty much commodities. DIMMs and RIMMs often are not.
> If you think sourcing memory components for servers is trivial, you
> probably haven't thought about it very much. But memory cost is probably
> not a big differentiator between alpha and integrity.

...and here again, we're talking about kit coming off the line now, not
futures. No additional costs there, either.

> >Where is your extra cost to continue to pump out DS15s, DS25s, ES45s?
>
> Just buy the parts and put them together.

That's the long and the short of it, when you burn-away the chaff.

> Same as rx1600, rx2600,
> rx4640. Or your run-off-the-mill PC. We should expect all of them to
> cost the same, right?

See the nearest business dictionary for the concept of "competitive
pricing", and remember: we're talking about stuff currently in
production - *NOT* futures!

> >Possibly the big stuff has rather high cost low volume parts. But the
> >design is over.
>
> All the alphaservers and all the integrity servers (and all the PA-RISC
> servers) are low volume products.

...and your point is ... ? The costs remain more or less constant,
unless you either:

o Stop producing a product
o Put a new product into production

We're not talking about either - we're talking about on-going
operations, business as usual,

> >I think it's time for this claim to gain some substance, or go away.
>
> Take it or leave it; I really don't care. Your comments seem particularly
> naive. I don't think you want information; you want to argue. I'll take
> your advice and go away.

Well, if you must. I'd have preferred to see some substantiation. So
far, every one of these has failed to show where costs for current
products change significantly. So, we're still looking for substance. 

-- 
David J Dachtera
dba DJE Systems
http://www.djesys.com/
Unofficial OpenVMS Hobbyist Support Page:
http://www.djesys.com/vms/support/
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http://www.djesys.com/vms/soho/
Unofficial OpenVMS-IA32 Home Page:
http://www.djesys.com/vms/ia32/
Coming soon:
Unofficial OpenVMS Marketing Home Page

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