IBM Europe Deals On Power Systems, Raises Storage Prices
February 16, 2015 Timothy Prickett Morgan
With the new year under way, with IBM shipping a substantially completed Power8-based system lineup, and with the company eager to ramp up its Power Systems sales, it would be reasonable to expect for Big Blue to be wheeling and dealing here in the first quarter of 2015. As it turns out, IBM has been quiet as a mouse on the deal front in the United States and Canada, but the company is cutting deals in Europe to bolster Power System sales. At the same time, paradoxically, and no doubt due to the strengthening US dollar, IBM Europe is raising prices on various storage arrays.
The 2015 Power Trade-In Program was put out in announcement letter ZAEP5177A on February 5, and like many past deals done by IBM, it offers customers with aging AS/400, RS/6000, iSeries, pSeries, System i, and System p machinery a rebate that ranges from $500 to $1,500. The rebates depend not on the machine that is being replaced, but rather on the machine that customers acquire, as follows:
Under the terms of this particular rebate deal, customers have to be using the new machine as part of an official business partner solution, and they have to agree to let this rebate go to that solution partner first and then be passed on to them. (There is probably a very sound reason for this, like allowing companies in the middle of the supply chain between the end user and IBM to book revenues at a higher price because this is a rebate, not a discount.)
The European trade-in rebate program is applicable to Power Systems machines running Power4 through Power7+ processors, and in the AS/400 line it stretches all the way back to E Series machines, which made their debut in 1992. (Yes, that was 23 years ago, and yes, there are still AS/400-E machines out there in the world running applications.) The full list of machines–and it is long–is detailed in the announcement letter.
There is one interesting caveat for this European trade in rebate deal. If customers have an AS/400 9401-150 machine, which was a very popular entry level machine and which ran the first PowerPC-based edition of OS/400, V3R7, when it was announced back in October 1996; it was eventually updated to OS/400 V4R4 and was withdrawn from marketing in October 2000. Anyway, if customers still have this 9401-150 system and they purchase Rational Development Studio (5770-WDS) and either DB2 Web Query Express (5733-WQE) or DB2 Web Query Standard (5733-WQS), then they can get a $1,500 rebate on the machine they buy. Customers can buy out of distributor stock or do system upgrades, where applicable, to get the rebates, and this trade-in rebate deal can be combined with other discounts and offers. You cannot buy used equipment under this deal. This trade-in rebate deal was effective retroactively for machines purchased in Europe from January 1 and will be available for deals through December 31 of this year.
In announcement letter ZA3I5191A, IBM has cooked up another deal for its Italian Power Systems customers, and in this case those IBM i shops that were adopters of blade servers sporting Power processors. Some customers went in big with Power-based blades, and when IBM moved to the Flex System modular systems in 2013 (which are now controlled by Lenovo Group) it stopped making blade servers. Many of these customers using Power6 and Power7 blade servers (there never was a Power7+ blade server and there was not a Power8 blade server, either) felt a little left in the lurch.
IBM wants these customers to move up to Power8 iron, of course, and to help encourage that IBM is offering customers a migration deal. In this case, the deal applies to customers with Power JS12 and PS700 blade servers (IBM had other Power-based blade servers, these two are the single-socket entry boxes) who are moving to a new Power S814 machine, which has six or eight cores. The migration offering is not, oddly enough, available for the Power S814 machine with only four cores. The trouble is, the old Power blades are in the P05 software group and the new Power S814 machine is in the P10 software group, so customers are looking at having to pay a pretty hefty upgrade fee. Last time I saw IBM i pricing, if you backed out the three months of Software Maintenance (SWMA) from the per-core fee, the P05 license cost $1,920. On a P10 machine, the per-core fee without any SWMA is $11,995. Obviously, that is a big difference.
Now, according to the IBM i processor and User Entitlement Transfer document that IBM put out last year, IBM puts machines in groups that are not IBM i software groups to figure out what the transfer fee is. If you have two machines in the same group, it costs $5,000 per core to move from machine in the same transfer charge group. The JS12 and PS700 blades are in transfer group 4 and the Power S814 is in transfer group five, and if you read the document, then the transfer fee is $17,000. A 70 percent discount on the shiny new IBM i license for this Power S814 P10 machine is still $5,100, but that is less than the $11,995 per core fee to buy a new license for that machine. This deal is not only restricted to Italy, but also to a maximum of two IBM i licenses.
I will make the same point I always make. Any deal given in one region should be available in any region, and there is no reason why Power blade customers from anywhere on earth should not have the same deal. Moreover, IBM should be happy to have any and all IBM i licenses to move from old gear to new gear at what is a little less than half price of a new license. Let customers move as many as they want–all of them–to new iron. The cap is silly. Anyway, the new deal runs from February 10 through June 30.
Effective February 12, IBM put out two notices that it was raising System Storage hardware product prices in Europe. It was not specific about precisely what products were getting price increases. But in announcement letter ZA15-1104, System Storage prices were raised by 15 percent in Austria, Belgium, Cyprus, Germany, Denmark, Spain, Finland, France, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Sweden, Slovenia, Slovakia. In announcement letter ZA15-1105, prices on System Storage hardware was raised by 10 percent.