IBM Cuts Deals on CPU and i5/OS for 550, 570, and 595 Boxes

Published: September 22, 2008

by Timothy Prickett Morgan

We're almost into the fourth quarter and just finishing up the last couple of business days in the third quarter, and that means IBM is looking to cut some deals on CPU cores and i5/OS licenses to make some dough out of the System i installed base.

Let's cover the hardware deals first. Last week, IBM announced a promotion that will run until December 31 that gives shops with System i 550, 570, and 595 servers rebates on processor activations on Power5 and Power5+ processors that are already inside their boxes and in a latent state. (IBM calls this capacity upgrade on demand.) The size of the rebate depends on the machine and the processor involved.

On System i550 machines, IBM is giving a rebate of $1,300 for customers who choose to activate 1.65 GHz Power5 core; oddly enough, the rebate on faster and more expensive 1.9 GHz cores on the i550 are only $750. (You would think the rebate would be bigger on the more expensive cores, making the discount percentage more or less the same. But IBM is clearly trying to give customers who were not on the bleeding edge performance with Power5 boxes a stronger incentive to spend a little money.) On i570 boxes with 1.65 GHz Power5 processors, customers who activate a core in their existing machines will get a $2,100 rebate, while those activating 2.2 GHz Power5+ cores will get $3,150. This spread is more in line with what I would expect. On i595 boxes, IBM is giving rebates on Power5 cores being activated, with 1.65 GHz Power5 cores getting a $5,250 rebate and 1.9 GHz Power5 cores getting a $8,125 rebate. With i595s equipped with 2.3 GHz Power5+ cores, customers activating cores can get an $8,000 rebate per core.

To take part in this deal, the i550, i570, and i595 machinery has to have been installed as of September 16. Processor activations are not apparently available for the new Power Systems i boxes, which are based on Power6 chips, or on earlier generations of Power4 and Power4+ iSeries machines. But with some clever talking, IBM and its business partners can probably be convinced to give rebates on processor activations on these new and old machines in the i family. Remember, IBM wants to have a good third and fourth quarter, and the financial services industry, which is big on Unix and Power Systems lately, is not doing so good right about now.

Keep this in mind as you consider the second deal IBM is offering on System i550, i570, ad i595 boxes, which is rebates on the i operating system as well as the i Application Server variant of the i5/OS and i platform that has the DB2 database deactivated. This deal also went into effect on September 16 and runs until December 31.

Like the core activation deal above, this promotion gives customers rebates that vary depending on the i box and what features they get. In all cases, customers have to buy at least two processor activations to get the rebates. The wording in this promotion says that it is available for the i operating system, which should mean i 6.1, but IBM has started renaming i5/OS V5R4 as i 5.4 (much as it started calling OS/400 V5R3 by the i5/OS V5R3 moniker after it did a rebranding two years ago). And if you read down into the details, it says it applies to 5722-SSA (which when you look it up in IBM's product catalog covers all of the V5 releases) and 5761-SSA (which is just i 6.1). No matter what the documents say, at this point in the world economy, if you have OS/400 V5R3, i5/OS V5R4, or i 6.1 running on your Power5 or Power5+ machine, I think IBM would be and should be thrilled to take your money and give you the rebate if you want to add some OS/400, i5/OS, and i workloads to your boxes.

Anyway, on i550 boxes, customers who activate the i operating system on two cores get $11,000 per core in rebates, and those who want to use i Application Server (for running WebSphere, PHP, and other workloads that do not need DB2/400 or its successors) can get a rebate of $3,500 per core if they buy licenses for two cores. On i570 machines, customers who activate two cores for an i operating system get $14,750 per core back as a rebate while the Application Server variant has a $4,750 per core rebate. The same rebates are given per core on i595 machines.

If you are acquiring a new Power6-based Power Systems i box, I would have told you to demand the same discounts on processor activations and i licenses for any additional cores you buy above and beyond the base cores activated in a configured box. As it turns out, IBM is giving a deal on i5/OS V5 and i 6.1 processor activations on Power Systems machines, but not on the i Application Server variant of the OS. This IBM deal, which also runs to December 31, is requiring customers to activate more cores than on the older iron. On Power 550 machines, customers have to activate i5/OS V5R3 or i 6.1 on three cores extra, and then they can get $11,000 per core on the third and fourth core. (This results in a fully loaded Power 550 box.) On the Power 570 box, customers have to put the i OS on five cores above the base number, and they get $14,750 per core on i activations for cores number 5 through 16 in the box. On the Power 595 machine, customers have to put i OS on 9 extra cores above the base configuration, and they get $14,750 back on core activations for cores nine through 64 in the box.

To take part in this deal, you can upgrade from iSeries Power5 and System i Power5+ iron into the Power 550, 570, and 595 machines.

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