IBM Tweaks Power 570, 595 Deals Yet Again

Published: August 17, 2009

by Timothy Prickett Morgan

If you can keep track of the constantly modifying and remodifying trade-in and rebate deals that IBM is offering to customers of various Power Systems iron, you are probably doing a lot better than IBM's own sales reps and its reseller channel, and you are definitely doing a lot better than me. There are several deals that all have the same basic shape that are running right now, and they are all aimed at giving customers who get new Power-based servers (or upgrade to them) some kind of deal. These deals keep getting tweaked, making it all that more confusing to keep track of them all.

Last week, IBM changed two long-standing deals that have been modified many times for its Power 570 and Power 595 servers and their predecessors in the System i and System p product lines; in fact, these two deals go back so far the machines were called the eServer i5 and p5 back then.

Just for amusement's sake, I will walk you through the genesis of the Power 570 deal that was updated last week. It all started back in November 2005 with announcement letter 305-209, which gave customers with p5 570 machines a trade-in credit of either $13,500 or $27,000 (depending on the configuration) if they kicked out a p5 650 box; the trade-in credits were capped based on the size of the p5 570 box customers used to replace one or more p5 650 boxes. IBM wanted customers to consolidate servers, and the more you consolidated, the bigger the ceiling on the trade-in credits. In May 2006, with announcement letter 306-110, the deal was expanded to include the p5 560 as a replacement for p5 650s, and then Unix iron from Sun Microsystems and Hewlett-Packard were added as replacement machines as part of Big Blue's effort to eat some market share.

In June 2007, the deal was changed again in announcement letter 307-532, adding more HP and Sun iron as replaced boxes as well as Sparc servers from Fujitsu. In August of that same year, in announcement letter 307-553, the first Power6 server, the System p 570 9117-MMA box, was added as a target box alongside the Power5-based System p5 560 and 570 boxes. In March of this year, in announcement letter 309-521, the deal was tweaked again to reflect changes in the Sun, Fujitsu, and HP Unix product lines. And finally, last week, IBM jacked up the rebates offered to customers replacing non-IBM iron with Power 570 machines, which you can see in announcement letter 309-558. The maximum trade-in credits allowed in this deal range from $10,000 on a Power 570 (using either Power6 or Power6+ processors) with four to seven processors in the box to $80,000 on a fully loaded Power6+ machine with 32 cores across three chasses.

Now, here's the rub. In a different--but similar--trade-in deal that has been running since I had hair on the top of my head (well, it seems like that long ago), IBM added some AS/400 and iSeries iron as machines that were eligible for replacement trade-in credit. On that deal, which I told you about in March in a story titled IBM Adds i Shops to Expanded p Shop Trade-In Deal, IBM offered a piddling $250 to $1,500 trade-in credit on AS/400 and iSeries boxes.

Forget that deal. Here's what you do. If you have a Power5 or Power5+ machine in the System i 550 or 570 class, figure out the analogous box in the System p lineup offered in this deal and demand exactly the same trade-in credit if you buy a new Power 570 or upgrade to one. We are all one happy Power Systems family, and more importantly, keeping an AS/400 shop happy is just as important as trying to get an HP, Sun, or Fujitsu shop to join the IBM AIX fold.

Ditto for the similar Power 595 server trade-in deal, which was also modified last week in announcement letter 309-559. Under this deal, companies getting a Power6-based Power 595 can get anywhere from $25,000 to $240,000 in trade-in credits, and they can consolidate one or more older IBM as well as old or new HP, Sun, and Fujitsu boxes to get those credits. The same deal should apply to Power5 and Power5+ machines with a System i label on them. There is no good reason why i shops should not get the same exact deal as AIX shops.

Be forewarned: the trade-in credit ceilings on the Power 595 deal are lower than they were back in March, but the amount IBM is giving for non-Blue gear are larger. I think IBM should give OS/400 and i5/OS that modernize and move to new iron--particularly in this sluggish economy--the same kind of generous deal it will give to customers who are not already in the IBM fold.

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