A Case Study in Acquisition Strategies
A large software manufacturer was interested in upgrading their IBM mainframe server capacity. They had targeted 1300 MIPS as their capacity requirement and focused on IBM’s Z-Series 64 byte architecture for software savings considerations. The 2064-107 was the mainframe the customer was planning on acquiring and could be provided on a “new only” basis for a price of $3,200,000.
After being made aware of the anticipated hardware acquisition, N-1 Technologies developed a mainframe donor strategy designed to dramatically reduce the cost of the new 2064-107. Under this strategy, N-1 would supply 65% to 75% of the intended 1300 MIPS from N-1’s pre-owned inventory at a significantly reduced per-MIP savings and simultaneously have the customer order the balance of the intended MIPS via a new model upgrade directly from IBM.
The result for the customer was a $1,000,000 cost savings as well as an additional 10% increase in capacity for the IBM processor the customer requested.
| IBM's original deal | |||
|---|---|---|---|
| 2064-107 | Price: $3,200,000 | $2,440/MIP | (1312 MIPS) |
| N-1's Solution | |||
|---|---|---|---|
| 9672-Z57 (pre-owned) | Price: $400,000 | $475/MIP | (842 MIPS) |
| Z57 to 2064-1C7 | Price: $1,825,000 | $3120/MIP | (585 MIP upgrade) |
| Total: $2,225,000 | $1,559/MIP | (1427 MIPS) |
Case Studies
- A Case Study in Acquisition Strategies
- A Case Study in Equipment Supply Alternatives
- A Case Study in Increasing the Value of Idle Equipment
- A Case Study in Equipment Supply Alternatives
- A Case Study in Technology Refresh Leasing