IBM Slashes Linux SupportLine Prices for System i and p
November 26, 2007 Timothy Prickett Morgan
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One of the key differentiators that IBM has always brought to bear on the midrange is well-regarded technical support for operating systems and related systems software. OS/400 and AIX have always had top-notch tech support–at least compared to their peers on other platforms. The advent of Linux, which is not controlled by Big Blue, presented a bit of a challenge to the company. But IBM has woven Linux into its SupportLine tech support services on its System i and System p Power-based platforms. Last week, the company dramatically reduced the cost of Linux support. For several years now, IBM has been reselling Linux distributions from Red Hat and Novell. Under the standard OEM agreements that servers makers ink with Linux distros, the server maker gets the dough for distributing the software (since it is free and open source software, there is no licensing fee for usage) and collects the money for technical support (which is how open source software makers pay the bills). The vendor typically gets to sell Linux support at a discount and often in a method that suits its product line and is different from that offered by the distro itself on the same platforms. The vendor also provides Level 1 and Level 2 tech support–meaning it answers the phones and tries to solve the problem–while the Linux distro provides the fail-safe, Level 3 support backing up the vendor. This is exactly the kind of deal that IBM has with both Red Hat and Novell for their respective Enterprise Linux and SUSE Linux Enterprise Server products when running on its Power-based System i and p server lines. Up until now, IBM has been charging for SupportLine tech support services on a per-core basis. But as of November 13, the company is shifting to a much more generous per system price for SupportLine service for Linux. Red Hat and Novell have shifted to per-system pricing with their latest releases, so IBM really didn’t have a lot of choice here. Not only are IBM’s Linux support prices lower on the per-system pricing scheme in absolute terms, in machines with more than a single Power processor core activated the savings is going to be huge. Under the old pricing method, IBM charged $600 per core per year for standard 9×5 SupportLine services for Linux on Power, and charged $1,640 for a year of 24×7 premium support. Customers willing to ink a three-year contract could get a killer deal, paying only $810 for standard support and $2,214 for a three-year contract. After the price change, SupportLine for Red Hat or SUSE Linux on Power costs $500 per system per year for 9×5 support and $674 per system for 24×7 support. Three-year contracts cost $1,406 per system for 9×5 support and $1,898 per system for 24×7 support. Let’s do some math to see how big of a deal this is. On a four-core Power5 box, standard SupportLine would have cost $2,400 but now costs $500–a 79.2 percent discount. The discount is even larger on premium SupportLine services on a four-core server, which used to cost $6,560, compared to $674 today–an 89.7 percent discount. As more cores are added to a machine, these discounts only grow to the point where Linux SupportLine services are a nominal fee. If you don’t think such pricing has an effect on other platforms, either directly or indirectly, you are flat wrong. While IBM’s generosity is to be commended, it does call into question the tiered pricing it still has for the Software Maintenance (which includes hardware maintenance plus SupportLine) on its System i and System p servers. Software Maintenance is still based on software tiers, which means the prices get higher as the machine gets more powerful–much as per-core Linux support pricing used to. Either IBM will cut prices on i5/OS and AIX Software Maintenance, or it will start losing footprints to Linux on the same Power platforms.
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