IBM Kills Off System i ServerProven, Standard Edition Rebates

The long-running rebate program that the System i division has sponsored to give customers who buy OS/400 and i5/OS servers plus systems and application software created by independent software vendors and certified through IBM‘s ServerProven program has been canceled. IBM made the announcement last week. IBM also killed off another rebate program for customers buying certain System i machines running i5/OS Standard Edition.

The last time that these two deals were tweaked was back on January 30, when the ServerProven rebate program was modified to allow governments, not just commercial institutions, to get rebates. At the time, the ServerProven rebate program gave customers buying new i5s as well as upgrades to them cash back that ranged from $750 to $70,000 on new boxes (the rebate depends on the size and price of the i5 box) and from $225 to $21,000 on upgrades to i5 boxes.

ServerProven rebates were not only available for the System i5 line, but also for IBM’s X64-based System x server product line. Last week’s announcement did not remove the rebates for the System x boxes, and it is unclear if IBM has already done this. (I did a search through IBM’s online announcement database and could not find such an announcement for the System x line. That does not mean that it didn’t happen, because I don’t trust the advanced search options on the iSource announcement site.)

The ServerProven rebates for iSeries and System i5 servers were once offered in North America and in Europe, and the rebates were much more generous in Europe for a while (at then-current exchange rates) since they did not just go to the customer, but to the ISV as well. As you might imagine, they were pretty popular. And that is why John Quarantello, the System i executive in charge of development tools, sent out a short email to ISVs explaining the situation and advising companies to update their Web pages and collateral, and then–presumably after a firestorm of criticism from the ISVs–followed it up with another email explaining why IBM had made the move to kill off the ServerProven rebates for the System i5 line.

Here is the relevant text of the question and answer portion of Quarantello’s email, which explains IBM’s position:

Question: Why is IBM withdrawing the ServerProven rebates?

Answer: The ServerProven rebate program is a promotion funded by the System i team in the Americas and Canada. After reviewing this program, the team decided to withdraw this promotion. The System i team in EMEA and AP used to participate in the ServerProven rebate program, but they withdrew their rebate promotion quite a long time ago.

Question: Is there any other System i promotion or rebate program replacing the ServerProven rebate program?

Answer: No.

Question: With the withdrawal of the ServerProven rebate program, does this mean that the overall ServerProven program, validation and logo are also being withdrawn?

Answer: No. This announcement only applies to the ServerProven rebate program in the America’s and Canada. The ServerProven program still exists and ISV’s can/should still promote their products as being validated by the IBM ServerProven program. The ServerProven logo can continue to be displayed on your Web sites as well as in the Global Solutions Directory.

Question: What is the value of the ServerProven program and logo for ISVs?

Answer: The ServerProven program is the primary IBM validation program for the Systems and Technology Group (STG). This program can be used to assure prospects and clients that ISV tools and solutions have been successfully deployed on STG servers (including System i) at real client locations. The ServerProven logo can be used on ISV Web sites to identify that your products are ServerProven. Members of the System i Tools program are also able to use the ServerProven program as a way to get highlighted on the System i Developer Road Atlas [see this IBM link for the atlas].

What IBM has not explained is whether or not this rebate is still helping to drive System i5 sales and merely became too expensive in terms of cutting back on profits for it to be sustained. And it never will explain this.

IBM also last week withdrew a rebate on System i5 520, 550, and 570 machines running i5/OS Standard Edition, a deal that was originally announced for commercial customers in October 2006 and had governments added to the deal at the end of January. Under this deal, IBM gave rebates of $10,500 to $215,000 to customers who upgrade from second-generation iSeries 8XX and first-generation iSeries i5 servers to these System i5 machines. Customers had to spend between $110,000 on the entry i5 520 configuration to $1.3 million on the largest i5 570 setup in this Standard Edition rebate. That worked out to roughly a 10 percent to 15 percent discount on the machines acquired.

RELATED STORIES

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IBM Tweaks Various System i5 Server Deals

ServerProven Rebate Program Gets Some Tweaks

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