Volume 19, Number 9 -- March 1, 2010

IBM Assigns Per-Core Pricing Metrics to Power7 Chips

Published: March 1, 2010

by Timothy Prickett Morgan

The funny thing about IBM's performance-based pricing metric for much of the systems and application software that it sells on its own and others' servers is that the Processor Value Metric has become an increasingly arbitrary number. It really is not based on relative performance at all--and that is a good thing for IBM's own customers.

In the wake of the launch of the Power7 chips and the initial Power 750, 770, and 780 systems on February 8, IBM put out revised PVU tables that added the new Power7 chips used in these machines, which can have four, six, or eight cores activated. You can see that table here. IBM sets per-PVU pricing for lots of software, including WebSphere, Lotus, and Tivoli products, and you multiply this price by the number of PVUs the logical partitions or physical machines have on which these programs are deployed to calculate the monthly or annual licensing fee.

As you can see, the Power 750 has been given a rating of 100 PVUs per core if a machine is configured with a Power7 chip with either six or eight cores. Now, given that IBM is bragging that each Power7 core offers more performance at 3.55 GHz than a 5 GHz top-end Power6 or Power6 part, it seems a bit unfair that the Power 750 is assigned 100 PVUs per core compared to the 120 PVUs per core for the Power6 and Power6+ chips used in the Power 550, 560, 570, and 595 machines. That is like having a 16.7 percent discount on software, and you can bet that is no accident. The entry Power 520 machines as well as the I/O and memory constrained Power-based blade servers based on Power6 and Power6+ chips have a rating of 80 PVUs per core, and it will be interesting to see what IBM does with Power7 chips in blades and entry machines with two, four, and six cores. A rating of 50 PVUs per core is not out of the range of possibility.

The PVU ratings for the Power7 chips used in the Power 770 and 780 machines seem more reasonable at 120 PVUs per core, lining them up with the Power6 and Power6+ machines. IBM will no doubt be tempted to set PVU levels at 120 for the forthcoming eight-core "Tukwila" quad-core Itanium 9300, but it could be a wiseguy and jack the price even higher, giving Power7 a price advantage.

There is some precedent for this. Until last spring, Xeon and Opteron processors from Intel and Advanced Micro Devices, respectively, had a PVU rating of 50 per core. But with the substantially faster four-core Nehalem-EP Xeon 5500s launched last March, IBM set the PVUs for these chips at 70 per core. I would not be surprised for IBM to push PVUs to 80 or 100 on the six-core Westmere-EP chips from Intel, due this month and plugging into existing Nehalem-EP machines, but I think it is still unlikely. It is far more likely that IBM pushes pricing on the eight-core Nehalem-EX processors, used in much bigger four-socket and larger iron, to 100 or 120 PVUs per core. Right up there with the processors used in top-end Power7 and System z10 machines.


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IBM Creates a Performance-Based Pricing Scheme for Software

The X Factor: Is Memory-Based Software Pricing the Answer?

VMware Goes for Per-Socket Pricing, But Can It Hold?

Oracle's Multicore Pricing: Right Direction, Not Far Enough

Microsoft Backs Intel, AMD on Dual-Core Licensing

Rotten to the Core: Chips, Lies, and Software Licenses

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Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik, Brian Kelly, Shannon O'Donnell,
Mary Lou Roberts, Victor Rozek, Kevin Vandever, Hesh Wiener, Alex Woodie
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