Final IBM i Software Maintenance Price Increases Released
April 6, 2020 Timothy Prickett Morgan
Back in early March, we told you that Big Blue was getting set to raise the prices it charges for Software Maintenance, short-handed down to SWMA and pronounced “swamma.” We had some estimated pricing, and on March 30, in an updated announcement letter 320-089, IBM released the updated price increases.
They are a bit different from the pricing that we saw in IBM’s initial presentations warning customers about the price increase, and the updated announcement has a spreadsheet that shows all of the different SKUs for SWMA for the P05, P10, P20, P30, P40, P50, and P60 software tiers. For the purposes of IBM i itself, the P30 through P60 tiers all have the same license and SWMA license fees, but this is not true for all IBM i-related software, which is why Big Blue still keeps those separate tiers. Keeping them separate also allows IBM to change the pricing on these tiers at some future date if it needs to do that to raise revenue. Given the current climate, we do expect that IBM will do just that, in fact: have some sort of increase in IBM i license charges. It all depends on how fast inflation spikes.
According to the announcement letter, the price increases were effective on April Fool’s Day, which is not what anyone wants to do, but the IBM announcement system has its own ideas about when to do things and it does not like change. Price changes have to start at the beginning of a quarter, period, apparently. We have captured the IBM Excel spreadsheet that has all of the pricing, which you can get here.
Here is the interesting, core bit of the price increase for SWMA:
|4908||P05 SWMA 1 YR||1,450||1,600||10%|
|4909||P05 SWMA 1 YR 24X7||145||160||10%|
|4911||P10 SWMA 1 YR||4,200||5,000||19%|
|4912||P10 SWMA 1 YR 24X7||420||500||19%|
|4914||P20 SWMA 1 YR||5,400||6,400||19%|
|4915||P20 SWMA 1 YR 24X7||540||640||19%|
|4917||P30 SWMA 1 YR||8,500||9,800||15%|
|4918||P30 SWMA 1 YR 24X7||850||980||15%|
|4920||P40 SWMA 1 YR||8,500||9,800||15%|
|4921||P40 SWMA 1 YR 24X7||850||980||15%|
|4923||P50 SWMA 1 YR||8,500||9,800||15%|
|4924||P50 SWMA 1 YR 24X7||850||980||15%|
|4926||P60 SWMA 1 YR||8,500||9,800||15%|
|4927||P60 SWMA 1 YR 24X7||850||980||15%|
As you can see, the P05 price increase is as expected back in early March. The P10 price increase, at $5,000 per year, was at the low-end of the expected range. The P20 price increase for SWMA came in at the midpoint of the expected range, at $6,400 per year, and the P30 and higher price was expected to be somewhere between $8,500 and $9,440 per year, but IBM settled on $9,800, which is a tad bit higher. These are per core prices, of course, just like the IBM i and licensed program products (LPPs) for IBM i are also per core prices. These are for normal 9×5 business hour support, and the IBM spreadsheet also shows the incremental cost to get 24×7 uplift.
Interestingly, the spreadsheet also includes the pricing for After License fees, which is what it costs to get current on an IBM i 7.X release if you are on an older V5RX or V6.X release and you want to get current. These are basically seeing the same price increase, and here is the ratio of license to after license costs:
|IBM i License||$2,995||$14,995||$44,000||$59,000|
|Percent Of License||107%||67%||29%||33%|
Basically, it makes no sense to try to upgrade a P05 license unless IBM is going to let you not have to pay $250 a pop for users when they move over. This seems unlikely. The After Licenses for P05 machines are simply too high, and so are those for the P10 machines. Particularly when you see the ratio of what companies are paying for the P20 and P30+ tiers. These prices should be dropped immediately and lower the barrier for customers to get current.