The Stick: IBM Jacks Up i5/OS V5R4 Prices

Published: January 10, 2011

by Timothy Prickett Morgan

When I saw that IBM had extended the marketing life of the i5/OS V5R4 release out to May 27--it was slated to be killed off on January 5 last week--I thought there might be a chance that Big Blue would finally get around to giving customers some sort of financial and technical help to make their program conversions and move on up to the current IBM i 7.1 release. But last week, after I had already written my story about the i5/OS V5R4 stay of execution, IBM did something I did not expect or want.

The company actually raised prices on core activations and Software Maintenance (SWMA) support for i5/OS V5R4 on Power5, Power5+, Power6, and Power6+ machines. (i5/OS V5R4 is not supported on Power7-based Power Systems machines.) So if the support extension was the carrot, then the price hike is the stick that IBM will be using in tandem to try to move stubborn customers ahead.

In announcement letter 311-005, which came out on January 4, IBM raised prices for very selected feature numbers relating to i5/OS V5R4, which is known by product number 5722-SS1 with various features getting an SSA, SSB, or SSC extension. (The SS1 extension means the whole operating system for an initial system order, while SSA means per-core charges for additional cores, SSB means the Application Server variant of the OS that does not include a license for the integrated relational database management system, and SSC means i5/OS per-user licensing where these apply on entry machines that come with the base OS built into the system price.) In the system manual, IBM i 6.1 has the product number 5761-SSX, while i 7.1 is known as 5770-SSX. You'd think that based on this pattern i 7.1 would be 5771-SS1 for the base operating system, but consistency is not a strong point in IT Land.

Just to add to the confusion, in IBM's online sales manual entry for V5R4, i 6.1 is given the 5772-SS1 designation. I don't think this means that prices have been raised on i 6.1; I think it is an error in IBM's system, given that i 6.1 is clearly labeled as 5761-SS1 elsewhere in the same system.

And as you can see from the January 4 price change table that I built describing the features that had their prices changed, there has not been a blanket increase in i5/OS V5R4 prices across all platforms where the operating system runs. Only the features shown in the table have had their per-core activation and SWMA prices increased by 25 percent. IBM's announcement letter does not tell you what these features are, and neither does its sales manual, but I keep all kinds of documents from the past and was able to piece the feature descriptions together to identify what has had the 25 percent price hike.

You will notice, for instance, that the price hike was not announced for iSeries Model 270, 820, 830, and 840 machines, which run a mix of S-Star and I-Star PowerPC chips, their SB2 and SB3 application server variants (remember those?), or the iSeries 800, 810, 825, 870, and 890 machines, which were based on the Power4 and Power4+ chips. Only customers who are activating Power engines for V5R4 on machines using Power5, Power5+, Power6, and Power6+ servers are getting hit by the price hike. IBM i 6.1 and 7.1 run on these four classes of machines, and the older prices prevail on that iron for those two operating systems.

Get the message? IBM wants you to move ahead. You will pay one way or the other.

In the January 4 announcement, IBM also made some other changes to pricing. If you want media for i5/OS V5R4, i 6.1, or i 7.1 as well as AIX on an iSeries, System i, or Power Systems box, that media will cost you $118, up 136 percent from the $50 IBM used to charge.

IBM also rejiggered support pricing on the Zend Core runtime and Zend Studio Professional development tools for the PHP environment that the company sells on the i boxes in conjunction with Zend Technologies. IBM raised the price of a gold-level support contract (9x5 business) for Zend Core for i by 25 percent, to $5,000, but the price of a platinum-level contract (24x7) dropped by 30 percent to $7,000. IBM cut the price of gold support for Zend Studio Professional for i by 20 percent to $799, and platinum support had its price chopped by 25 percent to $1,499.

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