IBM Cuts Back on Discounts on Power Systems i-DS8000 Deals

Published: January 19, 2009

by Timothy Prickett Morgan

Back in September, IBM announced a special deal on its high-end DS8000 disk arrays for customers attaching those arrays to Power Systems servers sporting the i5/OS V5R4 or i 6.1 operating systems. This deal was tweaked in early December, and then again last week. The tweaks last week are important because they raised prices on the configurations for the DS800 arrays, which given the state of the economy and IT budgets at larger enterprises, seems a bit odd.

The deal has four different Power System i and DS8000 disk array pairings. The first configuration is for a DS8100 with 9.3 TB of capacity and a license to storage software that spans up to 10 TB that is intended to be attached to a Power 570 box. The DS8100 was given a 62 percent discount off list price on the hardware and a 40 percent discount on the software, for a total cost of $256,948. Back in September, the discount was 67 percent on the iron and 45 percent on the software, for a price of $224,644. Not a big change, admittedly.

On the next configuration, also aimed at attachment to a Power 570, the DS8100 is configured with 21 TB of disk capacity and a software license that spans up to 25 TB. IBM was offering a whopping 70 percent off list on the hardware and 45 percent on the software to i shops back in September, for a DS8000 configuration cost of $378,685. But as of last week, this setup will cost $438,416, because IBM has reduced the discounts to 65 percent on hardware and 40 percent on software.

On the third configuration, which pairs a DS8300 array with 26 TB of capacity and a matching software license, suitable for attaching to a Power 595 box, the discounts have been pulled back by the same percentages as the second configuration above, which raises the overall configuration price for the DS8300 from $552,094 back in September to $640,456 as of last week. Ditto for another DS8300 setup for 84 TB of disk and a matching 85 TB software license on the array aimed at Power 595s, which now costs $1.13 million instead of $973,439.

Go figure. Those were, admittedly, some pretty steep discounts. Not the kind you expect to see from Big Blue in an announcement letter--that's for sure.

There is no way in hell a small or medium business sees a discount anywhere near that on storage, and that's exactly the customers IBM needs to foster as it fights against X64 servers and their cheap iron. The cheap storage aimed at high-end i shops clearly means IBM is trying to fend off competitors that are trying to get companies to port their AS/400 applications to other platforms, mainly Windows and Unix, with a smattering of Linux. IBM is trying to protect its Power Systems profits, but it really needs to protect its volumes, too. Where's that cheap storage deal for Power 520 and Power 550 shops?

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