IBM Wheels And Deals Just A Little To Push Iron

July 8, 2013 Timothy Prickett Morgan

The third quarter is now under way, and Big Blue’s marketeers are tweaking a few deals here and there to try to grease the skids, and the palms, a bit to get some business done before the end of September comes around and new CEO Ginni Rometty has to explain why the numbers were not so great.

Based on the relatively modest deals that IBM is doing, you would perhaps be given the mistaken impression that everything is going swimmingly out there in the Systems and Technology Group, and frankly, I would have expected for the company to get a little more aggressive with either direct pricing actions to make its Power Systems and System z mainframes or more competitive with X86 alternatives that are on the horizon in the second half. But for all I know, IBM is really focused on its top couple of thousand accounts, where the deals are all basically custom and in contention with alternative suppliers, and is content to let the channel do the discounting to move its servers, storage, and switches.

The point is, a deal is a deal, and if you collect a bunch of them together, you can cushion the blow. To that end, in the past several weeks, IBM has announced some new deals and tweaked existing ones in various geographies. And as I have said before, if you take a shining to one of the deals that is not in your geography, you should tell IBM you want it as well. It can’t hurt to ask, and it might even work to demand. You are the one with the money, after all, and IBM needs it more than you do.

To that end, in announcement letter ZA13-1003, IBM is extending the Power Trade-In Program is has been running in Europe, which had expired at the end of June. The deal is now going to run until December 31.

In the deal changes section, the July 1 update seems to imply that this promotion will now only be applicable to customers who upgrade from entry and midrange Power7-based machines to four models of the Power7+ server lineup. What IBM seemed to be trying to say, perhaps, is that those upgrading from Power7 to Power7+ machines could not get this promotion. The deal still clearly includes a list of ancient AS/400 and RS/6000 machines that can be replaced with new iron, and there are no Power7 machines on the list. Anyway, those acquiring a Power 720+ with the four-core Power7+ chip get a $1,000 rebate; six-core and eight-core Power 720+ buyers get $1,500; Power 740+ buyers get $2,500; and Power 750+ buyers get $3,000. Customers can upgrade up to five machines under the deal, and if they have more boxes than they, they have to request special permission from Big Blue.

Down under, IBM has a deal for both Aussies and Kiwis offering them a Flex System modular server chassis for $1 (in local dollars, of course) and also give you upgrades of systems software or switching for another $1. The New Zealand deal is in announcement letter NZ313-087 and the Australia deal is in announcement letter A313-087, and as IBM puts it bluntly, “We want you to experience the best blade architecture in market. We believe Flex is the best blade in market designed to meet the next decade of computing requirements.” And so if you buy three Flex System compute nodes–the x220, x240, and x440 are included, but inexplicably the Power-based p260+ and p460 are not included, grrrrrrrr–you get the chassis for the Aussie or Kiwi dollar. This chassis has a list price of $8,853 in Australia and $11,670 in New Zealand, so this is a fairly big chunk of change. Now, if you buy the Flex System Manager control freak (you really don’t have a choice, you know) with the Standard Software, IBM will give you an upgrade to the more capable Advanced Edition of the FSM wares for another $1. This upgrade normally costs a stunning $36,278 in Australia and $40,180 in New Zealand in local currency, so this is again a pretty hefty discount. (I don’t know what the Standard Edition costs, so I can’t tell how much.) Finally, if you buy the Flex System Fabric EN4093R 10Gb/sec Ethernet switch for the chassis, IBM will upgrade it to the CN4094 10Gb/sec converged Ethernet switch, which can support Fibre Channel storage protocols on top of Ethernet. This will cost you another $1. So three bucks gets you a free chassis and two upgrades. This deal expires on December 31.

In announcement letter NZ313-086 and its Australian counterpart, IBM is cutting the price of its RackSwitch G8264 top of rack switch by 40 percent, to $18,799 in Australian dollars and $23,999 in New Zealand dollars. The G8264 is a 48-port 10Gb/sec Ethernet switch, and the price cut will remain in effect until the end of the year. (Again, if IBM is cutting deals Down Under, it should be compelled to be equally generous up here in the Northern Hemisphere.)

The Down Under crowd got another special 25-month, interest-free financing deal on new Power Systems-IBM i machinery a few weeks ago, as we previously reported in this newsletter, and now IBM’s Global Financing arm is offering a 12-month interest free deal on used equipment it has in the barn. The Aussie deal is in announcement letter A313-071 and its Kiwi counterpart is in announcement letter NZ313-071, and you have to buy gear worth a total of $50,000 (in either kiwis or aussies). Power Systems servers of all makes and stripes are available under this deal, and so are IBM storage arrays. You can use the 12-month interest free financing on a short lease or on the first year of a three-year lease.

I noticed a theme in these deals, and no doubt you have as well. There are none aimed at the United States and Canada. But you can grab the marketing pen yourself and scratch it in. Fear not.