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May 30, 2008

1.009: fun with numbers (and charts)

Typical day at the NYSE One thing I've grown to depend upon over my past 13 months of blogging is that Fellow Blogger Tony Pearson will try and refute, twist and manipulate anything I say that could be construed as a challenge to IBM and/or its products. Guaranteed action/reaction.

It took him a couple of weeks to get around to responding to my post on GDDR vs. GDPS, but he didn't let me down.

And true to form, our resident Mr. Pennybags-lookalike spares no opportunity to misrepresent the facts in IBM's favor. Sure, you can run compile your own open-source version of Linux to run on IBM mainframe hardware as he says, but I sincerely doubt anyone would ever do that. That's awfully expensive hardware to be running generic home-brewed Linux on...

But fact is that you can't get IBM mainframe hardware from anywhere else but IBM, nor can you license the software necessary to run your z/OS-, z/VM-, z/VSE-, or z/TPF-based applications from anyone but IBM. And while GDPS might indeed support third party storage, the pre-requisite is that the storage vendor have licensed and implemented bug-compatible equivalents of PPRC and FlashCopy.

Hardly an "open system."

No, a real "open" version of GDPS would natively support TimeFinder and SRDF instead of the feature-limited IBM wanna-bee alternatives.

And though indeed EMC's GDDR supports only a subset of the capabilities of IBM's GDPS, that subset is pretty much 100% of what the vast majority IBM's GDPS customers are deploying - two site automated disaster restart for their geographically dispersed IBM z/OS-based Parallel Sysplexes running on IBM Series "z" hardware.

Yet GDDR costs SIGNIFICANTLY less to implement and maintain than IBM's GDPS for this same functionality. Does the same thing that most people need, for less. Plain, and simple...

To that fact, TonyP would have you believe that EMC is offering GDDR below cost - but you'll have to trust me on this one, nothing could be further from the truth.

No, the simple reality is that IBM has long been taking advantage of it's position as the sole-source provider to charge a massive premium for its mainframe products (hardware, software AND services). I'll go so far as to say that EMC's and IBM's costs to deploy their respective disaster restart solutions are probably very close to identical - IBM just charges more. A LOT more.

Which is why TonyP is throwing up all the FUD he can muster: he hopes to diffuse the very real threat to the exorbitant profits that GDPS has been delivering to IBM's bottom line.

Go figure....


lies, damned lies and statistics

But what is really whacky about TonyP's latest post is how he's used manipulated a comparison of IBM & EMC stock prices in an attempt to demonstrate IBM superiority. By selectively choosing his reference point (the last 6 months), he displays this chart as evidence that stock holders place more value in IBM's strategy than in EMC's.

Frankly, I think Tony is insulting the intelligence of his readership with that one.

But I guess it's really a matter of perspective.

Let's look at the same comparison TonyP uses from a slightly different point of view.

Instead of 6 months, let's look at how EMC and IBM stock appreciation compares for the last 6 YEARS:

IBM vs. EMC: prior 6 years
(As in TonyP's charts, IBM is BLUE, and EMC is RED - chart and colors courtesy finance.yahoo.com).

Now that's a little different perspective, isn't it? Clearly, using TonyP's logic, the chart shows that EMC's strategy has done markedly better than IBM's has since the "Bubble Burst" back in 2002.

fun with numbers

Fact is, the results of this relative comparison will differ depending upon which starting point you choose - Tony chose the one that works best for IBM (a recent high point for EMC stock). I chose just before the bubble, which is defensibly a more honest comparison of modern-day confidence, but admittedly one that favors EMC.

Neither is really an honest representation of the situation, however - just a misuse of statistics.

But since TonyP puts so much importance in it, I figured I'd play along.

And probably the only fair comparison is to look at how the two stocks have fared since their initial offerings:

IBM vs. EMC: all time
(As before, IBM is BLUE, and EMC is RED - chart and colors courtesy finance.yahoo.com).

Here, you can plainly see that EMC has the advantage, as measured by investor confidence.

But wait! The visual seems to be hiding the real situation. Look - that chart's plotted on a logarithmic scale!

Let's see how it appears using a more linear perspective:

(IBM is BLUE, and EMC is RED - chart and colors courtesy finance.yahoo.com).

Seems that the market today has almost 20,000 times more confidence in EMC's strategy than IBM's!


Oh, and thanks TonyP - without your steadfast commitment to refute
everything I say, I might never have thought of this angle!




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Wreckless Euroafrican

Is it just me, or have you got a serious issue with IBM?
Oh, and whilst I'm here, is there any reference site available anywhere that can be visited, where the non-IBM product which is the basis of your blog, can be seen to be actually, successfully implemented and operational? After all, just because it's a cheaper product, does not mean it's any good! it's like comparing a Chana LDV to a Landrover. Both could get you from A to B - but are you sure both will do so successfully - every time?
Just asking.

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