IBM Cuts p5 590 and 595 Prices by 20 Percent and More

Published: October 18, 2007

by Timothy Prickett Morgan

With the high-end Power6-based System p servers not yet in the market, and looking less likely to be available before the end of the year than it might have appeared earlier in 2007, IBM has to do something for customers who need a larger server than the only Power6-based machine in the lineup, the modified System p 570 that was announced in May. When you don't have the new product ready, your only option to move gear is to lower the price on the existing iron, and with a promotion that IBM announced this week, that is just what Big Blue is doing.

But, you have to act fast. The System p5 590 and 595 Processor Book promotion ends on December 21. That date, by the way, is the best indication that even if IBM does manage to get big Power6 boxes announced in 2007, they are not going to be shipping in volume until 2008. If companies haven't spent the money by the third week in December, they ain't gonna spend it.

Under this promotion, IBM is tossing in some of the system motherboards--which it calls books--for free when customers buy specific p5 590 and 595 server configurations. The p5 590 machines scale from two to 32 Power5+ cores, while the p5 595 machines scale from four to 64 cores. Each book in these machines has eight dual-core processors, for a total of 16 cores, divided evenly across two massive multichip modules that include external L3 cache for the processors as well as four dual-core Power5+ chips. You might be thinking big deal, but these boards cost tens of thousands of dollars with none of the cores activated.

Customers who buy a p5 590 server with one or two books and activate between 10 and 19 Power5+ processor cores running at 2.1 GHz will get one feature 8967 book for free, which is worth $72,300 at list price; processor activations list at $18,075 for these boards, which means companies have to spend between $180,750 and $343,425 on processor cores to get the freebie board. That works out to a discount as low as 14.8 percent (for two boards with 19 cores activated) of the raw processing features and as high as 28.6 percent (for a single board with 10 cores turned on). Customers wanting a p5 590 with more cores have to buy a machine with between 20 and 32 cores activated and two processor books, and if they do that, IBM throws the two books in for free. On a 32-core configuration, that works out to a 20 percent discount off the core processing elements of the system, and the effective discount is even deeper as fewer cores are activated.

AIX shops that want the larger p5 595 machine with 2.1 GHz or 2.3 GHz Power5+ cores are being given a similar deal with similar effective discounts. The 16-way motherboard for the p5 595 costs $88,000 with 2.1 GHz Power5+ cores and the motherboard with 2.3 GHz Power5+ cores costs $127,200; both of these board have no cores activated. Activating a 2.1 GHz core costs $22,000 and a 2.3 GHz core costs $31,800 a pop. System p5 595 customers that buy a machine with two, three, or four system boards installed and that activate from 17 to 32 cores get two of those boards for free; those that buy a machine with three or four boards and that activate between 33 and 48 cores get three boards for free; and those that have a maxxed out p5 595 with four boards and that activate from 49 to 64 cores get all four boards for free. On the largest p5 595 configuration, the boards and core activations list for $2.55 million, and this works out to a 20 percent discount as well.

Minimizing the cores activated and maximizing the number of free boards is the key to wringing the most savings from this deal.

IBM has been monkeying around with p5 590 and 595 prices in March and again in August to try to keep demand for the boxes, and did the same thing last year to keep customers moving up to Power5+ models. IBM has promised that it will offer an upgrade path for p5 590 and 595 servers into newer Power6 models.

If the Power6-based System p 570 machine is any guide, IBM is going to deliver twice as much performance in the same footprint, but it is also going to charge a premium for that performance, but also give some pretty substantial price cuts, too, and therefore a lot more bang for the buck. Back in early 2006, the core chassis of a p5 570 machine with 16 2.2 GHz Power5+ cores and 512 GB of main memory plus lots of Fibre Channel adapters that was used in the TPC-C online transaction processing test had a list price of $3.4 million and could perform just over 1 million transactions per minute (TPM). The Power6-based System p 570 using 4.7 GHz processors, equipped with 768 GB of main memory, cost $2.1 million at list price and could handle 1.6 million TPM. That's a 60 percent performance boost and a 38 percent cut in price while at the same time providing 50 percent more main memory in the box. And the price/performance improvement of the core computing complex in these two machines is a lot better--like nearly 68 percent.

Given this, it is perfectly logical for high-end System p customers to want to wait and see what IBM does with Power6 boxes. And those customers who play poker with IBM when they really can't wait to add capacity now have a discount that makes them a little more comfortable with buying a new box today.

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