Editing IBM Future Systems project (section)

===Replacing the 370===
Two months before the announcement of the 370s, the company once again started considering changes in the market and how that would influence future designs.{{sfn|Case|2006|p=57}} In 1965, [[Gordon Moore]] predicted that [[integrated circuit]]s would see exponential growth in the number of circuits they supported, today known as [[Moore's Law]]. IBM's [[Jerrier A. Haddad]] wrote a memo on the topic, suggesting that the cost of logic and memory was going to zero faster than it could be measured.{{sfn|Case|2006|p=57}}

An internal Corporate Technology Committee (CTC) study concluded a 30-fold reduction in the price of memory would take place in the next five years, and another 30 in the five after that. If IBM was going to maintain its sales figures, it was going to have to sell 30 times as much memory in five years, and 900 times as much five years later. Similarly, hard disk cost was expected to fall ten times in the next ten years. To maintain their traditional 15% year-over-year growth, by 1980 they would have to be selling 40 times as much disk space and 3600 times as much memory.{{sfn|Pugh|1991|p=541}}

In terms of the computer itself, if one followed the progression from the 360 to the 370 and onto some hypothetical System/380, the new machines would be based on large-scale integration and would be dramatically reduced in complexity and cost. There was no way they could sell such a machine at their current pricing, if they tried, another company would introduce far less expensive systems.{{sfn|Case|2006|p=57}} They could instead produce much more powerful machines at the same price points, but their customers were already underutilizing their existing systems. To provide a reasonable argument to buy a new high-end machine, IBM had to come up with reasons for their customers to need this extra power.{{sfn|Case|2006|p=58}}<ref name=sowa1>{{cite web |title=Advanced Future Systems |first=John |last=Sowa |url=http://www.jfsowa.com/computer/afs/index.htm |date=2016}}</ref>

Another strategic issue was that while the cost of computing was steadily going down, the costs of programming and operations, being made of personnel costs, were steadily going up. Therefore, the part of the customer's IT budget available for hardware vendors would be significantly reduced in the coming years, and with it the base for IBM revenue. It was imperative that IBM, by addressing the cost of application development and operations in its future products, would at the same time reduce the total cost of IT to the customers and capture a larger portion of that cost.<ref name=sowa1 />