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From: jpn@teddy.UUCP
Newsgroups: comp.sys.ibm.pc
Subject: Re: IBM hardware vs. software R & D costs
Message-ID: <4318@teddy.UUCP>
Date: Wed, 2-Sep-87 11:08:42 EDT
Article-I.D.: teddy.4318
Posted: Wed Sep  2 11:08:42 1987
Date-Received: Fri, 4-Sep-87 01:39:49 EDT
References: <4381@intelca.UUCP> <416@aucs.UUCP> <4048@utai.UUCP> <16481@toto.uucp> <2475@bnrmtv.UUCP>
Reply-To: jpn@teddy.UUCP (John P. Nelson)
Organization: GenRad, Inc., Concord, Mass.
Lines: 12

>Let's try it from another approach.  Say IBM's software R & D
>is on the same order as their total profits, or $10 billion a
>year.  With your ratio, their annual hardware R & D budget is
>a mere $1.  That's pretty impressive when you consider that they
>introduce dozens of new hardware products each year.

Perhaps that ratio refers to PROFIT.  Suppose IBM spends $10 billion
on each hardware and software development.  They make a profit of $10
billion on hardware (sold $20billion) and $1 on software (sold $10
billion + 1$).  This is not that farfetched:  IBM doesn't seem to make
much money on software.  Perhaps that is because IBM has yet to come
out with a decent software product!