IBM Commits To Power9 Upgrades For Big Power Systems Shops

July 10, 2017 Timothy Prickett Morgan

While there are plenty of small and midsized shops that make up the majority of installations of Power Systems running IBM i, it is the larger customers – a few hundred really big ones and several thousand pretty big ones – that generate the majority of the revenues for hardware, software, and services for the platform. So what IBM does or does not do to protect the investments of these large customers will affect the smoothness of a product transition like the Power9 one that will start early next year.

With each generational change, whether it is a baseline processor like the Power5, Power6, Power7, or Power8, or a tweaked and often shrunk variant like the Power5+, Power6+, Power7+ and Power8 with NVLink (which is really a kind of Power8+ but which was not offered to IBM i or AIX shops but rather only to a select few customers running Linux in hyperscale and HPC environments), IBM has to figure out if it wants to offer upgrades from one or more generations to the newer iron.

This is not just a technical decision, but an economic and accounting decision. Accounting rules in the United States and certain other countries around the world require for a specific amount of a machine to remain in place in the wake of an upgrade so that a serial number can be preserved. This is important because by preserving a serial number, you preserve the depreciation schedule for the machine and therefore any prior investment does not have to be immediately written off the books. In some cases, customers may want to write off that investment, and they would be advised to sell the old machine and buy the new one, doing what we call a push-pull upgrade. But in a lot of cases, customers buying big Power Systems iron end up leasing or financing the machines and they want to keep their payments constant as they increase their system capacity every two, three, or four years. And having formal upgrades that preserve the serial numbers make it a lot easier to do this.

That is why announcement letter 117-069, which came out on July 5, is important for customers who are currently running on Power8-based Power E870, Power E870C, Power E880, and Power E880C machinery. In this letter, which is brief, IBM explained that it would be trying to smooth out the upgrade paths, as it has done in every generation for as long as I can remember To be specific, IBM said that:

It plans to offer system upgrades from Power E870, E870C, E880, and E880C systems to the next-generation Power9 systems that will maintain the serial number of the existing IBM Power8 systems.
It intends to allow the next-generation, high-end Power9 systems to participate in the same Power Enterprise Pool processor capacity pooling with the Power E870, E880, or E870C/E880C system that use the Power8 chips.
It plans to offer the ability for new Mobile Processor and Memory activation features, initially purchased on a Power8 machine, to be eligible to convert and migrate to a Power9 system at no additional charge – subject to terms and conditions, which it did not specify.

It is not clear how much commonality there is between Power8 and Power9 systems in terms of whether they share the same processor sockets, chipsets, and other features. We know both systems use DDR4 main memory, but we do not know if IBM will be using its “Centaur” memory buffer technology on the high end machines; we know that it will not be required on certain low-end machines as was the case with the Power8 iron. We also know that IBM will be the first server chip maker to support PCI-Express 4.0 peripheral controllers and slots, which will offer roughly twice the bandwidth of the PCI-Express 3.0 peripheral controllers and slots in the current Power Systems line based on Power8 chips. This peripheral controller change may drive a socket change, and that may mean IBM is skating a little close, from the accountant’s perspective, on what is an upgrade and what is really a system replacement.

The amount of the technology change as well as IBM’s desire to either control or smash the secondary market for Power8 systems will dictate the price of these upgrades from big Power8 machines to big Power9 machines, and that is perhaps more important than the fact that there are upgrades at all. In the early days of the AS/400 market when workloads were growing faster than the Moore’s Law improvements in processing thanks to increasing clock speeds and even later when multi-CPU systems and then multicore CPUs in systems increased the throughput of machines, there was more demand for compute and IBM’s upgrade prices were very generous and encouraged customers to do an upgrade rather than wait. These days, the workloads at most shops are not growing very fast and the upgrade prices can be very steep.

Perhaps more interesting is the fact that the low-end machines that represent the bulk of the IBM i base do not have formal upgrades as far as I know, and it has been a long, long time since they did. Perhaps IBM would do better keeping the IBM i installed base on current hardware if it designed entry and midrange machines that could be upgraded and that also had attractive prices for those upgrades. But I don’t expect these, and IBM’s statement of direction for the high-end, enterprise-class Power Systems iron certainly did not lead me to believe this tune would change any time soon.

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