IBM Cuts Price Tags on i5 550s and 570s, Tweaks Canadian Deal

Published: November 12, 2007

by Timothy Prickett Morgan

It was bound to happen sooner or later. Last week, IBM cut prices on its midrange System i5 550 and sorta-midrange and more powerful System i5 570 machines that are based on the Power5+ processors that came out last year. The price changes were meant to stimulate sales of these platforms, which have plenty of oomph and which will be able to run the future V6R1, due in early 2008.

While IBM has one Power6-based machine in the field--the 9406-MMA server that bears the System p and System i 570 brand--and will have a second--the JS22 blade server--to market in two weeks, only the former supports i5/OS V5R4M5. The JS22 blade server is not expected to get i5/OS support until V6R1 ships, maybe in February or March. Midrange customers have known for months (thanks to reading this newsletter) that a real revamped line of Power6-based machines, including a 615 entry box, a slightly more powerful 625 machine, and a midrange 655 server, are in the works. There is also talk of a JS12 blade server, which could be a single-socket, dual-core blade for more modest i5/OS, AIX, and Linux workloads than the two-socket, quad-core JS22 blade is designed to support.

Knowing new machinery is around the corner, customers obviously want to see a little price/performance improvement now if they are buying new System i gear in the fourth quarter rather than waiting until new iron comes out in the new year. And so, IBM last week cut prices on i5 550 and i5 570 machines as well as upgrades to i5 550 machines from prior iSeries 810 and 825 servers running OS/400 Enterprise Edition. (I created a table showing the old and new prices for the machines with price changes, which you can see by clicking here.)

The price cuts were pretty steep, ranging from a low of 9.2 percent on a System i5 550 Capacity BackUp (CBU) server to a high of 27.3 percent on the System i5 550 running i5/OS V5R4 Enterprise Edition (a savings of $60,000). Prices to upgrade to an i5 550 Enterprise Edition machine were cut by between 20.3 percent to 29 percent, shaving $40,000 off the price for these upgrades. On the System i5 570--the prior generation using Power5+ processors running at 2.2 GHz, not the new one using Power6 chips running at 4.7 GHz--IBM cut prices by between 11.3 percent to 16.9 percent on machines running i5/OS Enterprise Edition and by between 6.1 percent and 7.1 percent on CBU variants of these boxes.

In a separate announcement last week, IBM made a change to a System i-BladeCenter deal that it announced on October 2. This deal gives customers who spend $150,000 in the United States in American Greenbacks or $220,000 in Canada in Canadian Loonies to get a new System i machine (or to upgrade to one), a free BladeCenter blade server configuration. I pointed out in my coverage of this deal that considering the U.S. dollar has fallen so far because our imports wickedly outweigh our exports that the Looney is now at parity with the Greenback. So making Canadians spend an extra $70,000, like this was 1990 and the Canadian dollar was trading at 80 cents to the U.S. dollar, seemed just a bit unfair. So, last week IBM tweaked the deal so Canadians only had to spend $150,000 Canadian.

<Smile.>

Next week, we'll have a little talk about the British pound and the euro. . . .

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