IBM Boosts Prices On Lab Services Engagements
January 14, 2019 Timothy Prickett Morgan
Happy New Year, you have a price increase! On January 1, in announcement letter 319-030, IBM announced a pricing action and you might have not even noticed it, since it was not presented to customers in the normal wrap up of product announcements, withdrawals, and price changes that Big Blue puts out every week. We certainly didn’t see it mentioned. At any event, because we don’t trust that IBM puts everything out at once, we often periodically take a look back in the archive to see if “new” old announcements pop up.
In any event, on January 1, IBM said that it was going to be raising prices on a bunch of different consulting engagements with its Lab Services division within its Systems Group. The Lab Services division related to the IBM i platform is legendary in the IT world, and has won awards for its depth of knowledge and customer service, and those techies who work for Lab Services on System z mainframes or storage systems are no slouches. But they also don’t come cheap, as we discover in the price change.
Take a look:
We had no idea what IBM charged for Lab Services, but as you can see, the cost is steep and just got steeper. The cost of the engagements depends on the type you choose. There are Standard, Premium, and Local/Remote variations of the service, and the precise definitions of Standard and Premium services is not clear from any of the poking around we did on the Internet. All of the pricing is for eight person-hours, which means it can be one person for eight hours, two people for four hours, and so forth.
You have to have an IBM System z or Power System machine or an IBM storage product to get the services, or you have to be a business partner trying to help a customer downstream from IBM. The idea is to help customers do the tough stuff such as adopting new technologies like cloud computing or machine learning, tweaking the performance of applications or systems, migrating from vintage systems or systems made by others to new IBM machines, or providing skills training for on-site IT staff in a particular area. (The Migration Factory services that help customers move from other midrange systems to IBM i are under the Lab Services umbrella, as are a bunch of other things.) Presumably, more complex engagements are covered in the Premium service, while more mundane things are handled in the Standard; the remote services are a way to get a less costly engagement by having IBMers working remotely from Rochester or Poughkeepsie or any number of the other key facilities that backend Lab Services, or from local IBM offices where other techies are stationed.
The 12 percent price hike that was implemented on January 1 means that IBM is charging $437.50 per hour for a daily engagement of the Standard service and $562.50 per hour for the Premium service. The Local/Remote version of the Lab Services is priced the same as Standard onsite version, even though the techies are not onsite, so presumably this is more like a remote version of the Premium service. We are basing this guess on price alone.
Business partners who peddle IBM i systems and also support them on behalf of customers offer similar services to their customers, and some even offer them to other business partners who get stuck in a bind. From what we can tell, pricing is much more aggressive among these partners, who try to keep it down below $200 per person-hour for remote engagements with end users and they tend to charge a little less for partners because it helps keep the machinery moving into customer sites. By this measure, IBM Lab Services is pricey, but there is a level of expertise that Big Blue can bring to bear in some cases that presumably justifies the premium that the company is charging. The point is, whether you get such services from a partner or IBM, you should really make sure that they have a broad and deep understanding of the IBM i system, and that means doing some extra legwork and getting recommendations from past clients. You could potentially save a lot of money compared to Lab Services. It all comes down to paying not only for expertise, but speed in deploying it.
