There Were Actually More Power Systems Price Hikes Than We Thought
April 25, 2022 Timothy Prickett Morgan
Last week, we told you about two price hikes on Power Systems hardware, software, and services that were announced on April 13 and take effect for hardware and software on May 7 and for selected Software Maintenances services on July 1.
One of the price changes came in our announcement letter roundup and the other came through the business partner network, and on a hunch on Sunday night with another story still needing to be written, I logged into the IBM announcement letter system to see if anything had happened while I was away last week sitting in the sun on the Florida panhandle. Even though my email notifications are set to show me all things relating to IBM i, AIX, Linux, Power Systems, and storage, as it turns out a whole bunch of pricing changes that Big Blue has made over the past several months that I was unaware of, and if you get emails from IBM with the same criteria, you might be unaware of too.
First, let’s review what we covered last week and then add to it so all of the price change information that we know about is all in one place. In announcement letter 322-379 dated April 13, IBM announced price increases on licensing charges for selected Power Systems software – namely IBM i, AIX, and PowerHA – as well as for Software Maintenance for these products. And on April 7, in announcement letter 522-378, which we now have access to for some reason (we did not last week), affect a range of Power Systems machinery and peripherals, but notably it includes price hikes on the Power S924 and the Power E980 servers and various base system, processor card, memory card, and networking systems in these and other systems.
But wait, there’s more. On February 25, in announcement letter 322-368, announced similar price hikes on the entry Power S914 server, which is also popular like the Power S924 among the IBM i customer base. With this price change, which went into effect on April 1, the cost of the base Power S914 server was increased by 41.3 percent to $4,450, and the cost of the various peripherals used in this machine and others was also increased by between 7.2 percent and 42.8 percent, depending. (You can download the spreadsheet here that details all of the price increases.)
Interestingly, buried in this announcement was a price increase on the Power10 processors used in the high end “Denali” Power E1080 server announced last September and, for the next few weeks at least, the only Power10-based machine that Big Blue has launched and is selling. The base four-socket Denali system, which comes with four 10-core Power10 chips running at 3.65 GHz, costs $185,625, an increase of 25 percent, and the price of a Denali node with four 12-core Power10s running at 3.6 GHz costs $302,500, also up 25 percent. The top-end Denali node, with four 15-core Power10s running at 3.55 GHz, now costs $404,800, up 15 percent. Main memory on this machine is now also 25 percent more expensive and mainstream SAS flash drives are now 33.3 percent more expensive as of April 1. This was after a 10 percent price hike on the Power10 processor modules last fall in announcement letter 322-312 only a month after the Denali machine was launched and a 50 percent price hike on the base server chassis, to $30,000, too. This just tells you how screwed up the supply chain for server parts must be if IBM is changing prices officially on a new product like this. I have never seen anything like this before.
Looking back into the price change archive, we also saw that on February 1, in announcement letter 322-347, IBM Lab Services increased its prices for a single-day, on-site consulting service and for local/remote consulting for IBM systems and storage products, which is called a ServiceUnit (no space). There are ServiceUnits available for Power Systems and System z servers (individually, not together) as well as for IBM storage and for IBM i specifically (and uniquely) as a platform. There are Premium and Standard onsite consulting levels, with the Premium now costing $4,800, up 6.7 percent, and the Standard now costing $3,800, up 8.6 percent. (It is not clear what the difference between these two levels are.) Local/remote consultations, which were the norm during the first two years of the coronavirus pandemic, had a price decrease to $3,200 a day, down 8.6 percent. (It looks like IBMers like working remotely; it is probably a much more profitable engagement for Big Blue, too.) These Lab Services price increases went into effect on March 1.
Also of possible interest to IBM i shops is a pricing action that Big Blue took on April 20 in announcement letter 322-388, raising prices on its FlashSystem all-flash storage arrays, which oddly enough also have hard disk drive options (which I did not know until looking at the price increases). These price hikes are more modest, with prices on the base FlashSystem 7300 arrays are up by 3 percent to 9 percent, depending on the model, and enclosure prices for drives increasing by 3 percent to 4 percent. The list prices on 3.5-inch 12 Gb/sec SAS flash drives are going to be increased by 13 percent to 17 percent; the cost of 2.5-inch 12 Gb/sec SAS flash drives are the same at the same capacity and rose by the same amount. NVM-Express flash drives are a lot more expensive – we are talking about 3.8X to 4.7X for a given capacity – and have price increases that range from 7 percent to 16 percent. These price increases on the FlashSystem products take effect on May 19.
I am going to keep a better on eye on this pricing stuff and not trust the automatic email filters IBM supplies for my convenience.