IBM Holds i 6.1 Prices Steady, Slashes Application Server Fees

April 5, 2010 Timothy Prickett Morgan

It has been three and a half years since IBM started to dabble with user-based pricing on OS/400 V5R3 and almost three years to the day since Big Blue decided–and thank heavens–to institute modest licensing fees and user-based pricing for the i5/OS V5R4 operating system. With the launch of the Power7-based machines in February, that was the perfect time to make any changes to packaging and pricing for the i For Business platform.

The Power 750, 770, and 780 machines launched in February run i 6.1.1, and there was no mention of any pricing for the software stack in the announcements. IBM did not give out the AIX and i software tiers for the new boxes in the announcement letters (I looked twice on announcement day and now just as I was writing this story), and I eventually found the information in a separate spec sheet. (Note to IBM: The announcement letters and online hardware sales manual should always have the full information, as the IBMers who put ivory letters together since before I was even born know full well.) Just so you know, the Power 750 is in the P20 tier for i and in the small group for AIX; the Power 770 is in the P30 tier for i and in the medium group for AIX; and the Power 780 is in the P50 group for i and in the large group for AIX. Now, I know what you are thinking. The Power 795 should therefore be in the P60 tier for i 6.1.1 and i 7.1 when it is announced this month (it is looking like next Tuesday or Wednesday), and you might be thinking that this leaves something to be in the P40 tier. Maybe there’s a Power 790 coming out that will fill this gap. Why not? The more the merrier, right?

Well, as far as the operating system is concerned, the P30 and P40 software tiers have been merged since April 2008, when the AIX and i hardware platforms were converged, and ditto for the P50 and P60 tiers. For many add-on features of the i5/OS and i flavors of the operating systems, those tiers do mean progressively higher prices. So, for instance, the DB2 Symmetric Multiprocessing feature, which allows for SQL queries to be parallelized over multiple processors in the system, costs $12,000 on a P30 machine, $18,000 on a P40, $24,000 on a P50, and $30,000 on a P60.

Ian Jarman, manager of Power Systems software at IBM, confirmed that pricing and packaging for i 6.1 and i 6.1.1, the latter of which is required on all Power7-based systems, has not changed and that the pricing from last year for Power6 and Power6+ systems remains in effect. IBM has cut the prices it is charging for the base Application Server variant of the i5/OS and i variants. (More on that in a moment.) But first, let’s review the pricing for the basic operating system, which is not information you can lay your hands on easily these days:

On the Power 550 and 750 machines, which are in the P20 software tier for i5/OS and i 6.X, activating the operating system costs $40,000 per processor core, plus $50,000 per core for 5250 Enterprise Enablement; Software Maintenance (SWMA) cost an additional $4,000 per core per year.
On Power 570 and Power 770 machines, the operating system (including the integrated DB2 for i database management system), is in the P30 software tier and costs $53,000 per core plus $6,000 per year for SWMA. You can license 5250 Enterprise Enablement for $50,000 per core, or activate it on the entire machine for $150,000.
On some Power 595 machines and the new Power 780 machines, the operating system is in the P50 tier, costs the same $53,000 per core plus $6,000 per year for SWMA. You can license 5250 Enterprise Enablement for $50,000 per core, or activate it on the entire machine for $150,000, just like on P30, P40, and P60 machines.

Basically, big customers with big boxes who would balk at paying any more of a premium for the i platform don’t pay extra for the operating system. It would be simple to say that the smaller customers are subsidizing the high-end ones, but the prices for the basic system software are so much lower on entry Power 520-class machines that it is fair to say that the reverse is actually true. A very small number of i shops are paying a very hefty software bill, while a much larger number of customers are paying a much smaller bill–on the order of a couple of grand per machine, if you back out the hardware costs. IBM has to charge low prices with the Power 520s to better compete with Windows, and it can’t charge at the high-end for fear of losing customers to Unix, Windows, or Linux.

Which brings me to Application Server, the version of the i5/OS and i platform that IBM created in April 2007 to make it attractive to deploy Java and other application on processors in a Power server complex. Not all processors in a system need to have the database, but IBM has always priced the platform as if every engine is running the database. With i5/OS V5R4 Application Server (5722-SSB), processors and their logical partitions could run OS/400 and i applications while accessing databases in other partitions, or not accessing any databases at all (as weird as that idea might sound).

The Application Server variant of i5/OS V5R4 and i 6.1 used to cost $14,000 per core on Power 550 and Power 560 machines and $19,000 per core on Power 570 and 595 machines. After a price cut that took effect on February 8–but for which I did not see any announcement letters–IBM is flattening the price for Application Server to $9,000 per core, regardless of the machine it runs on. That includes the new Power7-based Power 750, 770, and 780 boxes. And when i 7.1 comes out, the Application Server edition of that operating system will be priced the same, at $9,000 per core. So you don’t have to wait to see what will happen. What is not clear is what IBM is charging for Software Maintenance on Application Server, but if it is anything like i5/OS and i proper, then SWMA should cost about $900 per core per year.

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