04
Mon, Nov
5 New Articles

IBM Latest Price Actions Give to Some, Take from Others

Analysis of News Events
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times
We all know the saying, "Every cloud has a silver lining." However, it's also true that every silver lining has a cloud, and a rain-filled one at that. As a case in point, consider the iSeries price changes that IBM announced last week. While many customers will save some extra silver because of those changes, others will get soaked by IBM for a few more dollars.

Pennies from Heaven

Let's start with the silver lining: the price reductions. If you're in the market for additional iSeries memory, you may pay less for it. IBM cut prices on its 512MB and 1GB memory cards for the Model 270 to $1,792 and $3,584, respectively, a 12.5 percent reduction. As for the Models 820 and 830, prices for the 512MB and 1GB memory cards dropped by 20 percent to $4,096 and $8,192. This brings prices for these models into parity with pSeries memory prices, which have been lower historically than those for the iSeries. Sadly, prices for Model 840 memory, which now costs more than twice as much on a per-MB basis as Model 820/830 memory, remain unchanged.

Many customers will also benefit from lower prices for selected DASD features. Starting immediately, you can save over 30 percent on 17.54GB, 10,000 RPM drives for your Model 170, 7XX, 270, or 8XX. This DASD feature now costs $1,400, the same price IBM charges for its older 8.58GB drives. You can also save over 23 percent on the 35.16GB, 10,000 RPM drives, which now cost $3,200. As with memory, these prices are now similar to those IBM charges for comparable pSeries drives.

IBM has also cut prices on selected processor feature codes and a handful of interactive CPW features. As I mentioned in my article last week, IBM stated that it will no longer charge extra for inactive Capacity Upgrade on Demand (CUoD) processors. This announcement triggered significant price cuts for Model 840 CUoD processor features. While time does not permit me to determine whether these cuts really do bring CUoD feature prices in line with those for non-CUoD features, the reductions are significant. For instance, the price for a Model 840 with feature #2352 (an 8/12-way, with eight active CPUs and four on standby) declined by $94,000. By the same token, an i840 with processor feature #2353 (a 12/18-way) or #2354 (the 18/24-way) now costs $80,000 and $104,000 less, respectively. IBM has also slashed prices for upgrades to these processor features by similar amounts and has cut the cost to activate standby processors by $34,000 per CPU.

Companies that buy smaller iSeries models will also appreciate some targeted price reductions for the Models 270 and 820. To get customers to buy more-powerful i270s, which require the purchase of an interactive CPW feature, IBM cut the price of the #1519 interactive feature on the Model 270-2432 from $56,300 to $32,300. It also slashed the sticker for the #1520 interactive feature on the Model 270-2434 from $112,500 to $52,500. These actions reduce prices for these two models by 36 percent and 43 percent, respectively. Price cuts were even greater for the base versions of the Model 820, which offer no interactive performance. You will now pay $24,000 less for an i820 uniprocessor, $43,500 less for the two-way model, and $60,000 for a four-way. As a result, you'll pay at least 50 percent less for these servers than you did a couple of weeks ago.

If you're a WebSphere user, you could also reap savings from what IBM calls its "sub-capacity" license plan. This plan applies to WebSphere Application Server (WAS) Advanced Edition 3.5, all versions of WAS 4.0, and all future versions of WAS running on the iSeries. It also applies to both the Business and Professional versions of WebSphere Commerce Suite 5.4, though not to earlier releases. If you host any of these products in an LPAR on an iSeries, you will only pay the per CPU charge for the number of CPUs that are hosting the products, rounded up to the next CPU.

To better understand the new plan, let's say you're running WAS 4.0 Advanced Edition on an 8-way iSeries within an LPAR that uses 2.3 CPUs. Until now, you would have had to pay $12,000 per CPU for all eight CPUs, or $96,000. Under the new plan, you'll pay for only three CPUs (2.3 rounded up to the next CPU) for a total of $36,000. For now, IBM will trust customers to accurately report the number of CPUs they are dedicating to WebSphere products. In future WebSphere releases, however, license management software will generate usage reports that customers will have to submit to IBM on a monthly basis.

For Software Subscribers, Stormy Weather

Into each life some rain must fall, and so it will be for the vast majority of iSeries owners who have a Software Subscription contract. On July 1 of this year, prices for all iSeries and AS/400 Software Subscription contracts will increase by 25 percent.

Unfortunately for many customers, this price increase will come at precisely the time when their old contracts expire. As you history buffs may remember, IBM announced Software Subscription in the spring of 1998. At that time, it told customers they would have to subscribe by July 1, 1999. Those who missed the date could not receive software upgrades until they purchased a subscription and paid additional currency access fees. Naturally, many customers subscribed near the deadline date, and a good number of them signed up for 3-year contracts. Those contracts will be expiring this summer, just as the new prices take effect.

Fortunately, iSeries customers in the United States can renew their Software Subscription contracts before July 1, 2002, and take advantage of the current lower prices. (IBM may make similar early renewal programs available to customers in other regions as well.) To qualify, you must make sure that IBM receives your order by June 24 and that you receive the new subscription by July 1. Realize, however, that renewing early may not be the most financially attractive option for you. According to my IBM sources, customers who renew early may not be entitled to some middleware products such as WebSphere Advanced Edition, MQSeries, or Domino. If that's the case, customers with significant middleware investments may not benefit from an early renewal. I'm talking with IBM to learn more about the pros and cons of renewing early, and I hope to write an article about this issue soon. In the meantime, ask your IBM account representative or Business Partner to help you weigh your options.

In short, IBM's latest announcements leave you with some interesting decisions to make. If you make those decisions wisely, you can dodge any budgetary storms on the horizon and, with some luck, find those silver linings that IBM laced into its iSeries price list last week.

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it..

LEE KROON
Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology.
BLOG COMMENTS POWERED BY DISQUS

LATEST COMMENTS

Support MC Press Online

$

Book Reviews

Resource Center

  • SB Profound WC 5536 Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application. You can find Part 1 here. In Part 2 of our free Node.js Webinar Series, Brian May teaches you the different tooling options available for writing code, debugging, and using Git for version control. Brian will briefly discuss the different tools available, and demonstrate his preferred setup for Node development on IBM i or any platform. Attend this webinar to learn:

  • SB Profound WP 5539More than ever, there is a demand for IT to deliver innovation. Your IBM i has been an essential part of your business operations for years. However, your organization may struggle to maintain the current system and implement new projects. The thousands of customers we've worked with and surveyed state that expectations regarding the digital footprint and vision of the company are not aligned with the current IT environment.

  • SB HelpSystems ROBOT Generic IBM announced the E1080 servers using the latest Power10 processor in September 2021. The most powerful processor from IBM to date, Power10 is designed to handle the demands of doing business in today’s high-tech atmosphere, including running cloud applications, supporting big data, and managing AI workloads. But what does Power10 mean for your data center? In this recorded webinar, IBMers Dan Sundt and Dylan Boday join IBM Power Champion Tom Huntington for a discussion on why Power10 technology is the right strategic investment if you run IBM i, AIX, or Linux. In this action-packed hour, Tom will share trends from the IBM i and AIX user communities while Dan and Dylan dive into the tech specs for key hardware, including:

  • Magic MarkTRY the one package that solves all your document design and printing challenges on all your platforms. Produce bar code labels, electronic forms, ad hoc reports, and RFID tags – without programming! MarkMagic is the only document design and print solution that combines report writing, WYSIWYG label and forms design, and conditional printing in one integrated product. Make sure your data survives when catastrophe hits. Request your trial now!  Request Now.

  • SB HelpSystems ROBOT GenericForms of ransomware has been around for over 30 years, and with more and more organizations suffering attacks each year, it continues to endure. What has made ransomware such a durable threat and what is the best way to combat it? In order to prevent ransomware, organizations must first understand how it works.

  • SB HelpSystems ROBOT GenericIT security is a top priority for businesses around the world, but most IBM i pros don’t know where to begin—and most cybersecurity experts don’t know IBM i. In this session, Robin Tatam explores the business impact of lax IBM i security, the top vulnerabilities putting IBM i at risk, and the steps you can take to protect your organization. If you’re looking to avoid unexpected downtime or corrupted data, you don’t want to miss this session.

  • SB HelpSystems ROBOT GenericCan you trust all of your users all of the time? A typical end user receives 16 malicious emails each month, but only 17 percent of these phishing campaigns are reported to IT. Once an attack is underway, most organizations won’t discover the breach until six months later. A staggering amount of damage can occur in that time. Despite these risks, 93 percent of organizations are leaving their IBM i systems vulnerable to cybercrime. In this on-demand webinar, IBM i security experts Robin Tatam and Sandi Moore will reveal:

  • FORTRA Disaster protection is vital to every business. Yet, it often consists of patched together procedures that are prone to error. From automatic backups to data encryption to media management, Robot automates the routine (yet often complex) tasks of iSeries backup and recovery, saving you time and money and making the process safer and more reliable. Automate your backups with the Robot Backup and Recovery Solution. Key features include:

  • FORTRAManaging messages on your IBM i can be more than a full-time job if you have to do it manually. Messages need a response and resources must be monitored—often over multiple systems and across platforms. How can you be sure you won’t miss important system events? Automate your message center with the Robot Message Management Solution. Key features include:

  • FORTRAThe thought of printing, distributing, and storing iSeries reports manually may reduce you to tears. Paper and labor costs associated with report generation can spiral out of control. Mountains of paper threaten to swamp your files. Robot automates report bursting, distribution, bundling, and archiving, and offers secure, selective online report viewing. Manage your reports with the Robot Report Management Solution. Key features include:

  • FORTRAFor over 30 years, Robot has been a leader in systems management for IBM i. With batch job creation and scheduling at its core, the Robot Job Scheduling Solution reduces the opportunity for human error and helps you maintain service levels, automating even the biggest, most complex runbooks. Manage your job schedule with the Robot Job Scheduling Solution. Key features include:

  • LANSA Business users want new applications now. Market and regulatory pressures require faster application updates and delivery into production. Your IBM i developers may be approaching retirement, and you see no sure way to fill their positions with experienced developers. In addition, you may be caught between maintaining your existing applications and the uncertainty of moving to something new.

  • LANSAWhen it comes to creating your business applications, there are hundreds of coding platforms and programming languages to choose from. These options range from very complex traditional programming languages to Low-Code platforms where sometimes no traditional coding experience is needed. Download our whitepaper, The Power of Writing Code in a Low-Code Solution, and:

  • LANSASupply Chain is becoming increasingly complex and unpredictable. From raw materials for manufacturing to food supply chains, the journey from source to production to delivery to consumers is marred with inefficiencies, manual processes, shortages, recalls, counterfeits, and scandals. In this webinar, we discuss how:

  • The MC Resource Centers bring you the widest selection of white papers, trial software, and on-demand webcasts for you to choose from. >> Review the list of White Papers, Trial Software or On-Demand Webcast at the MC Press Resource Center. >> Add the items to yru Cart and complet he checkout process and submit

  • Profound Logic Have you been wondering about Node.js? Our free Node.js Webinar Series takes you from total beginner to creating a fully-functional IBM i Node.js business application.

  • SB Profound WC 5536Join us for this hour-long webcast that will explore:

  • Fortra IT managers hoping to find new IBM i talent are discovering that the pool of experienced RPG programmers and operators or administrators with intimate knowledge of the operating system and the applications that run on it is small. This begs the question: How will you manage the platform that supports such a big part of your business? This guide offers strategies and software suggestions to help you plan IT staffing and resources and smooth the transition after your AS/400 talent retires. Read on to learn: