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Volume 12, Number 5 -- March 12, 2012

IBM Does March Madness Rebate On Power 770s

Published: March 12, 2012

by Timothy Prickett Morgan

It looks like IBM is a bit eager to peddle some relatively big Power Systems iron to put the finishing touches on its first quarter. And it is no surprise, with a number of long-running promotions getting mothballed in recent weeks. If there is any rule of marketing, it is that you need to keep constantly changing things up to hit the hot buttons of different customers, so IBM is trying a rebate deal with an extremely short time window, and only on one machine: The Power 770.

There have been two generations of Power 770 boxes. The original ones from February 2010, the 9117-MMB machines, which I call Power 770 Gen 1 machines to keep them straight in my head. These are based on 3.1 GHz and 3.5 GHz processors, PCI-Express 1.0 peripheral slots, and 8 GB memory sticks, and scale from one to eight processor cards with either 48 or 64 cores, depending on the processor chosen. The Power 770 Gen 2 machines, designated 9117-MMC by IBM, uses slightly faster 3.3 GHz and 3.7 GHz Power7 processors, has PCI-Express 2.0 slots, and supports 16GB memory sticks to double up the system memory capacity. The machines have exactly the same list price for processor cards and processor core activation features.

Last week, in announcement letter 312-038, the Power Systems 770 March Rebate promotion launched, and it gives customers buying either Power 770 Gen 1 or Gen 2 machines rebates ranging from $7,000 to $37,000 depending on the number and type of processor cards they buy for their machines.

The rebate amounts are not static across any particular processor card, which is odd, and they are not really related directly to process core speed, either. The Power 770s, like the Power 570s before them, put a two-socket processor card into a 4U chassis and then allow you to glue two, three, or four of these processor enclosures together to expand the system.

This Power 770 March Madness deal, as I will call it, requires a little math to make sense of it. So to help you figure out the deal, I built a table outlining its math . The table shows the cost for list price for the Power 770 processor features and then the cost to activate all of the cores on each processor card. You don't have to activate all the cores on the processor card as far as I know, but my comparisons show this so you can figure out the effective discount on the hardware. If you don't activate all the cores now, you can think of it as getting a deeper discount now on the processor card and paying list price to activate cores now.

Depending on the processor card and the number you buy, the effective discount on the Power 770 processing capacity ranges from 10.5 percent to 15.1 percent. The Power 770 Gen 1 machines have a little less CPW oomph than the Power 770 Gen 2 machines, so the effective cost per CPW on the latter machines is a bit lower. And really, with the capacity costing the same, you should insist on having the new Gen 2 stuff since it supports larger memory and faster I/O. I am a bit surprised that the discounts are not twice as deep on the older Power 770 Gen 1 machines, to be honest.

An important thing to remember: This is the cost of the base hardware only and does not take into account the cost of operating systems. Yes, the six-core Power7 chips run faster and are more expensive on a per-CPW basis than the eight-core basis, but AIX, Linux, and IBM i all cost the same on a core regardless of the performance of the core. (Yes, that is silly.) The price difference for the more expensive and faster cores is far outweighed by the $40,000-per-core fee for IBM i 6.1 or 7.1. On fully loaded Power 770 processor cards (not including the cost of the chassis or memory or storage) the cost of Software Maintenance rivals that of the processing capacity and roughly speaking the IBM i license is a factor of 9 to 17 higher than the CPU capacity cost. In general, the CPW capacity (CPU plus OS plus SWMA) is anywhere from 3.6 percent to 6 percent more expensive on fully burdened Power 770 cards.

I don't think that most customers in IBM i Land are going to need 48 or 64 cores fired up with the IBM i operating system, but they may want extra PowerVM partitions running atop lots of cores for Linux or AIX for infrastructure workloads that are not running on IBM i. I have said it before and I will say it again, if you have to be in a P20-class or higher machine and you have 40,000 CPWs or under, take a hard look at that four-core and six-core Power7 processor card running at 3.72 GHz in the Power 750 Gen 1.5 machines, and if you don't need as much memory or I/O expansion, the Power 740 with the same 3.72 GHz will cost a third as much with all the operating system and software support costs burdened on those processors. And, the Power 720 costs a little more than half as much again and you can get a box that hits 46,300 CPWs, too, if you go to eight cores running at 3 GHz.

On machines that are just running AIX and Linux, which do not have an integrated operating system and which cost a few grand per core, this is more of a straight hardware discount on the Power 770s.

The Power 770 March rebate deal is available on deals inked between March 7, the day the deal was announced, and March 31, the last day of the first quarter for IBM's 2012 fiscal year.

As readers of The Four Hundred no doubt recall, because you are smart that way, IBM put out a processor book promotion back in January that runs until June 22 that gives customers a 16.8 percent on processor books for Power 770 machines using the six-core Power7 processors. Presumably you can get the March Madness rebate and have the freebie processor books thrown at you and mix both deals. In the processor book deal you have to two buy two books, activate a dozen cores, and then IBM gives you one book for free. You can do that twice to flesh out the system.

If you can add both of these deals together, you save $17,329 on the six-core Power 770s with two processor cards and another $18,000 from the March Madness deal. On the feature 4980 or 4983 processor cards, that works out to a 20.6 percent effective discount on those two machines, and as I said above, go with the feature 4983 card used in the Gen 2 version of Power 770 machine.


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