IBM Tweaks Prices Up And Down On Memory And Storage
February 17, 2020 Timothy Prickett Morgan
Big Blue usually tells customers about price changes on Power Systems hardware and related software, but we have not seen any such price changes in a long time. As it turns out, IBM is telling business partners through their normal announcement channels about any tweaks to price changes, but these are not showing up in the customer feeds that we have subscribed to for three decades.
This could be deliberate, or accidental. We have no idea, and honestly, it would take too long to ask. But now we know, and an intrepid reseller made us aware of a recent price change that affects Power Systems iron and we are telling you about it now. We are going to try to find out if there have been any other price changes that have snuck by us now that we know we are not seeing the full list of changes as they happen. This particular business partner only knew about the pricing action because he went into the online configurator and noticed the prices were different and then went rooting around for the letter to see what the deal was and happened to find it. Maybe IBM has always had price changes behind the scenes that partners knew about and we didn’t, but that is kinda messed up if customers don’t know about a price decrease and partners do – and we do not know if this is the intent IBM had, but it is surely the effect. If there is a price increase, you can bet that gets passed straight through to customers, like grit through a goose.
In announcement letter 320-049, which came out on January 7, 2020, the Power Systems price action was done in all markets and the price change went into effect on that day. The announcement actually says that customers are not being notified, but partners can print it out and give to customers affected as the IBM sales team deems appropriate when it comes to the price increases, and for the decreases, volumes discounts are unaffected by the cut and remain in effect at the same proportions. The price changes are in effect for a slew of features, and are not listed in text form, but rather in an Excel spreadsheet, which you can see here.
We did a little math on the sheet and present it below this brief analysis. First, the disk price changes are all over the map. Prices for 15K RPM small form factor drives with 300 GB capacities rose by 6 percent or 7 percent, depending on the model and the machine they go into. For other fatter SAS drives, prices went up between 6 percent and 14 percent, and still others they dropped by 10 percent. The pattern is not obvious, but we are sure there is a supply chain and technology vintage rational to it all. Prices of NVM-Express flash drives, ranging in capacity from 1.6 TB to 6.4 TB, had price cuts ranging from 16 percent to 27 percent. On the memory front, price cuts ranged from 2.4 percent with 8 GB DDR4 memory sticks to as high as 18.5 percent for 64 GB memory sticks; price cuts on 128 GB memory sticks were cut by only 10.7 percent, but generally, the fatter the memory, the steeper the cut. When it is all done, the 8 GB sticks cost just shy of $50 per GB, the 16 GB, 32 GB, and 64 GB sticks cost between $34 and $36 per GB (roughly), and the 128 GB sticks cost $39 per GB. The price changes affect Linux-only machines except for the Power S924, which is highlighted in yellow as Machine Type 9008 in the tables.
You can see all of these price changes for Power Systems stuff announced on January 7 in the tables below: