April Fools, Or Not: IBM Raises Power Systems Prices
February 28, 2022 Timothy Prickett Morgan
In an inflationary environment with all kinds of parts shortages, it is no surprise when IT suppliers raise their list prices and/or cut back on the depth of their discounts as they negotiate deals. We are certainly in that kind of environment, and we are also on the cusp of new Power10-based entry and midrange server announcements from IBM as well.
Given all of this, we expected Big Blue to be announcing some price increases on older Power9 iron, which might be in short supply and therefore might be subject to “opportunistic pricing” as too much demand is chasing too little supply. (Gamer and datacenter GPUs are selling at 2X manufacturer’s list prices right now, just to give you an example.) In fact, we expected a much broader set of hardware and maintenance price increases by now, and the hardware price increases that IBM put out in announcement letter 322-368 might be pretty steep in terms of percentages, but they are not as broadly applied across the Power Systems line as we had expected. And thus far, we have not seen a general price increase on tech support services for the Power Systems line, either, but in our bones, we feel that it is coming sometime soon.
The price increase for selected Power Systems servers and their CPUs, memory, and peripherals was announced on February 25 and takes effect on April Fool’s Day, which of course is April 1. (No Joke.) While this is an IBM United States announcement, the price increases are in U.S. dollars and translated into other currencies and applied globally.
The complete set of price increases are outlined in this spreadsheet provided by IBM, and they are all over the place from 10 percent to 42.7 percent. It is interesting that IBM has doubled the price of the base “Denali” Power E1080 server from $30,000 to $60,000, and the prices of the CPU modules that go into the Power E1080 have also been jacked up. Four of the Power10 processors with ten active cores each running at 3.65 GHz now cost $185.625, up 25 percent, and four of the 12-core Power10 processors running at 3.6 GHz costs $302,500, up 25 percent. The price of a quad of the top-bin quad 15-core Power10 processors running at 3.55 GHz will rise by 15 percent to $404,800. DDR4 memory cards, which come in 128 GB, 256 GB, 512 GB, and 1 TB capacities, will also rise by 25 percent starting April 1. And prices for 931 GB SAS flash drives rill rise by a 33.3 percent to $2,094 on April 1.
In other words, if you are going to buy a Power E1080, you might want to do it in the next month or so.
The price of the base Power S914, which has a single socket and employs the Power9 processor that is soon to be replaced with a new Power S1014 machine using Power10 chips, will increase by 41.3 percent to $4,450.
Prices on power distribution units for racks and for various PCI-Express 3.0 storage controllers are also up starting April Fool’s Day.