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iSeries Model 250s Tweaked to Attract SMB Customers
by Timothy Prickett Morgan
IBM will this week begin shipping a new line of lower-priced, entry iSeries servers, which it hopes will help to boost OS/400 server sales among small and midsize businesses, which seem to be balking at buying the relatively costly iSeries Model 270s. The new entry iSeries is based on the existing Model 250 server, which employs IBM's Northstar PowerPC processors. Its main feature is a dramatic price cut, which will hopefully help IBM get unit sales and revenues for the iSeries line back up where they belong.
In IBM's view of the OS/400 world, the very popular AS/400 Model 170--which used the company's 100 MHz and 125 MHz Apache, as well as 200 MHz and 250 MHz Northstar, PowerPC processors--was replaced by the iSeries Model 270, which uses a mix of 400 MHz and 450 MHz Pulsar and 540 MHz and 600 MHz S-Star PowerPC processors. Within the 64-bit PowerPC AS processor family, performance coincides very closely with clock speed, and it doesn't take a mathematician to figure out that the Model 270 is anywhere from four to six times as powerful as the Model 170. For many customers--particularly those with only a few dozen users to support and slim budgets that will not allow them to spend $50,000 or $100,000 for a server, operating system, and database management system--the Model 270 is not just overkill, it is a deal killer. That is why, when IBM debuted the iSeries line, in October 2000, it dusted off the Model 170, gave it some expansion features, and relabeled it the Model 250. To IBM's way of thinking, the iSeries Model 250 is a replacement for the iSeries Model 150 Advanced Entry server, the smallest and least-expensive OS/400 server, which IBM put out five years ago as part of the original e-business push into the SMB market. The installed base has a different opinion of the Model 250, in that it is viewed as a cheaper alternative to the Model 270 that is appropriate for customers who are running traditional RPG and COBOL green-screen applications and who do not want to run Java, WebSphere, or Linux on their OS/400 platforms. IBM has mulled creating a special geared-down Model 270 server to attack the SMB market, but for whatever reason--probably having to do with the cost of the S-Star processors used in recent models--such a product has never seen the light of day. So to keep a solution that appeals to the traditional SMB market, IBM has to keep the Model 250 around, even though the machine is three-and-a-half-years old. These low-end machines have also traditionally been popular in branch offices, but at IBM's prices they were very costly, compared with Windows-based and Linux-based alternatives.
But just because IBM is keeping the Model 250 around--and longer than I think it had planned for--does not mean that it will remain a general-purpose, flexibly configured member of the iSeries family. In fact, starting on July 2, the Model 250 will not be available through IBM or its reseller channel except as a preconfigured server in an entry configuration or a growth configuration. Both machines will have the same basic hardware--a single 200 MHz Northstar processor with no L2 cache memory and 256 MB of main memory. The server will also be equipped with a PCI disk controller that supports four disks, one tape drive, and a CD-ROM drive. The server is preconfigured with two 17.54 GB, 10K RPM disk drives, which are mirrored for data protection. The preconfigured Model 250 also has a 4 GB, 1/4" tape drive; a two-line modem adapter; an Ethernet card; and a twinax workstation controller. The server comes prebundled with OS/400 V5R1 and the integrated DB2/400 database; Query for iSeries (5722-QU1); DB2 Query Manager and SQL Development Kit (5722-ST1); and iSeries Client Access (5722-XW1).
The only difference between the two flavors of the Model 250 will be the processing power in the boxes. The entry configuration of the Model 250 has a server CPW rating of 50 and a 5250 interactive CPW rating of 15 (the OS/400 governors are clocking down the server and interactive performance of this machine, which probably has a flat-out rating of about 400 CPWs, with a little L2 cache memory thrown on the motherboard). The growth version of the Model 250 is rated at 75 CPWs on server workloads and 20 CPWs on green-screen workloads. Incidentally, these are the same power ratings that the Model 250 has always had, and they are essentially the same as the ratings on the Model 170-2289 and Model 170-2290 servers that came before them.
These machines differ from each other in one major way: price. When the Model 170-2290 was announced, in late 1998, a base machine with 64 MB of memory and 4.2 GB of disk capacity had a list price of $8,995. The following spring, to spur more entry-server sales, IBM announced the Model 170-2289 with a $6,995 price tag and slightly geared-down performance. In the fall of 2000, IBM debuted the same two servers as the Model 250-2295 and Model 250-2296 with some prebundled tools and 256 MB of memory and a 4.2 GB disk drive for $7,400 and $11,000, respectively. With last week's announcements, these machines are available as the Model 250 entry and growth configurations, with four times the disk capacity, but for $4,800 and $8,300, respectively. This is a considerable price cut--35 percent on the entry configuration and 25 percent on the growth configuration--and one that IBM is probably not happy making. It is also probably an admission by IBM that the Model 250 was overpriced for the past 18 months. The other interesting price change is that IBM has eliminated monthly maintenance charges on the entry Model 250 (which used to be $84 a month on the regular 250-2295) and has dropped maintenance on the growth Model 250 to $11 a month, down from $95 a month for the 250-2296. These maintenance prices are way out of line with the entry-server market, and IBM seems to be conceding this.
Customers buying these new Model 250s have to be careful, however. IBM is not offering upgrades from the entry to the growth configuration, or to other members of the iSeries family. You buy this box, you have to do a push-pull upgrade if you grow out of it. This rigidity is exactly the same approach that other server vendors use in their entry Wintel and Lintel servers.
The new Model 250s will be available worldwide starting February 22.
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