IBM Adds Enterprise Power8 Systems To Trade-In Deal

December 1, 2014 Timothy Prickett Morgan

In the wake of the launch and now the delivery of the initial models in the Power8-based Power E870 and E880 machines, IBM is adding the high-end boxes to a long-running trade-in deal.

The Power Systems Trade-In Program was last modified back in June, when the scale-out variants of the Power8 systems, which have one or two sockets, were added as target machines in the deal, offering customers between $500 and $2,000 if they got rid of ancient AS/400, iSeries, System i machines or any number of other Unix and proprietary machines. The deal also covers customers who want to move workloads from X86 machinery from Hewlett-Packard, Dell, and Fujitsu.

In announcement letter 314-120, the rebates are considerably larger for the bigger Power8 systems, but not as large as on some other machines in the Power7 and Power7+ line, oddly enough. (I will explain.)

On the Power E870 machine, the rebates range from a low of $14,000 on a 32-core system using 4 GHz cores to $24,000 on an 80-core system using 4.19 GHz cores. For the Power E880, a 32-core machine using 4.35 GHz chips gets an $18,000 trade-in rebate while a 64-core machine with cores running at the same 4.35 GHz speed gets a $24,000 rebate.

Under this deal, which has been in effect on an on-again, off-again basis for as long as I can remember, IBM assigns a maximum trade-in credit based on the machine that customers acquire as the replacement machine. You have to buy specific processor cards and quantities of them to get the trade-in. Then there is a list of trade-in credits for the replaced machines, and you can consolidate multiple machines as part of the deal and drive up the trade-ins until you hit the maximum set by the new box. In many cases, as I have pointed out in the past, you have to turn in a lot of Power 7XX blades to get a reasonable trade-in credit, which will no doubt annoy customers who feel like they got sold a product that has no future beyond Power7 processors because, well, that is precisely what happened. The trade-ins on rack and tower Power7 machines are higher per unit of compute, and that is very likely because their resale value is higher for exactly the reason cited above. It strikes me that the rebates on Power7 and Power7+ machines are much more generous than on Power8 machines, and this is no doubt a reflection of the very much higher bang for the buck that Power8 machines are offering. IBM has to compensate somehow if it wants to unload the older Power7 and Power7+ gear in its own warehouses or those of its reseller partners.

The new rebates took effect on November 20, and this is an open-ended deal with no expiration date.