IBM Hikes Memory Prices On Power8 And Power9 Iron
June 11, 2018 Timothy Prickett Morgan
It is a problem that all server makers are facing: Raw DRAM and flash memory prices have been rising for the past year and a half, yet they are loath to raise their own prices because such rude spikes will actually curtail demand for servers given the sizes of the slices of the server cost pie that main memory and now flash memory comprise. When memory prices started rising at the end of 2016, most people thought it would not last for more than a few quarters, but the DRAM and flash makers are happy to make more dough doing the same amount of work, and thus they have increased supply but not to the degree that is necessary to meet market demand.
And so, inevitably, the server makers have to start passing through the price changes. And that is what IBM is going to do with its Power8 and Power9 systems shortly, so if you are buying a new system now or want to add memory to an existing system, you have a short window to get it done.
In announcement letter 318-102, which came out on May 15, IBM bit the bullet and said it was going to raise memory prices effective July 1 on certain Power8 and Power9 systems. Forgive us for the late notice, but this announcement was not in the normal flow of announcements that we see out of IBM, but it is still ahead of the price increase, which ranges from a low of 2 percent to a high of 35 percent, with the increases rising as the density of the chips on the DRAM DIMM increasing. On the 128 GB memory cards, where IBM is stacking up the DIMMs, the price increase is the highest and we get the impression that IBM is raising its prices to the level that its peers in the server racket have done for ultra-dense memory. Here is the list of price increases for customers in the United States:
As you can see, IBM is also raising the price of the four-socket Power8 processor card on the Power E880 and Power E880C servers by 20 percent. There is no explanation of this increase, and it seems odd. It might have more about the pricing that IBM wants to set for the future high-end “Fleetwood” Power E980 kickers to these machines, which we told you about back in October 2017.
The price increases come after IBM had chopped main memory prices by anywhere from 10 percent to 25 percent when it transitioned from DDR3 memory to cooler, denser, and faster DDR4 memory on the scale-out servers in the Power Systems line back in October 2016. Prices are still lower than what the were in 2016, but that is mainly because, at list price anyway, IBM charges a lot for main memory compared to other server makers. That is why it has exclusively reduced the price of processors, memory, and disk drives on its Linux-only Power Systems machines over the years.
With the Power9 machines, as we explained back in March, IBM chopped memory prices on Power9 scale-out systems by anywhere from 21.5 percent to 44.2 percent compared to the then-current prices of the Power8 memory, and then it also chopped memory prices by anywhere from 11.2 percent to 25.8 percent on DDR4 memory sticks. Pricing for DDR3 memory staid the same and remained relatively high, on a per gigabyte basis, compared to the DDR4 memories also allowed in Power8 machines.
Here is a handy dandy chart that IBM put together to help business partners understand the considerations of the memory price changes on Power8 and Power9 iron and what happens when the eight or 16 memory slots on a Power8 machine and the 32 memory slots on a Power9 machine are fully populated with DDR4 memories of various capacities:
This table shows the relative prices for memory features and for a given capacity of memory for Power8 and Power9 machines, both before and after the July price hike. The interesting parts of the chart are the columns on the right, marketed July P8 versus P9, with B/(W) and a percentage with them. The B/(W) is not anything to do with bandwidth, as my brain initially tried to do, but “Better Or Worse.” As you can see the cost per capacity using 16 GB, 32 GB, or 64 GB memory sticks is better on Power9 machines, but it is worse for fatter sticks weighing in at 128 GB and allowing capacities of 3 TB or 4 TB in the machines.
Here’s the point. The Power9 machines have twice as many memory slots in most cases as the Power8 machines that are still available and most like them in terms of base memory, disk, and I/O slots and number of processors. The “Centaur” buffered memory used in Power8 machines is still competitive in configurations that require more than 2 TB, as you can see. IBM is recommending that for Power9 machines that need 2 TB or less, they should use 64 GB memory sticks since these offer the lowest cost per unit of capacity and 128 GB memory sticks should only be used when customers need a high memory capacity today and know that they will need a higher one in the same system with the same level of compute at a future date. In most cases, twice as many 64 GB sticks in a Power9 machines will offer the same capacity and better bang for the buck than half as many buffered 128 GB memory sticks in a Power8 machine.