Subscription Pricing Coming To IBM i And Power Systems

May 3, 2022 Timothy Prickett Morgan

The advent and evolution of cloud computing – or one might say the reinvention based on timesharing and renting that was prevalent for large systems in the early days of corporate computing in the 1960s and 1970s – has had a lot of effects on the IT market in the past 15 years. But perhaps the biggest effect is to shift IT budgets away hardware acquisition and perpetual software licenses with technical support for both and toward a simpler subscription pricing model that spreads the cost out over time and moves spending on IT wares from the capital expense part of the balance sheet to the operating expense part.

As part of the May 3 announcements, IBM is committing to offering subscription term licensing for the IBM i software stack, starting first with entry Power9 machines in the P05 software tier for both the core IBM i 7.5 software and for user enablement licensing. IBM is also promising to extend the IBM i subscription pricing to the higher P10, P20, and P30 software tiers and add other Power Systems hardware models to the subscription pricing. And over the longer term, IBM will extend subscription pricing to the licensed program products, or LPPs, that run atop IBM i. And finally, there is a statement of direction to offer a bundle of systems software and hardware under a unified subscription plan.

Here’s the roadmap for subscription pricing:

The exact pricing has not been revealed yet, but according to Allison Butterill, IBM i offering manager, Big Blue is still working out how to do this. The idea is to have subscription terms that run from one to five years, with a no-cancellation policy during the contract term, and that the price of the subscription will be lower than the cost of a perpetual license. Presumably, this means that the subscription price is lower than the cost of the perpetual license plus Software Maintenance. Apparently, IBM’s Software group has a standard formula for figuring out what a subscription price is based on a perpetual license costs, and we are working to find out what that formula is and what the pricing will be for the IBM i stack and the hardware.

This is a very interesting development, and we suggest IBM call the subscription offering BlueLake.

We will follow up once we see the announcement letters and get more information to tell you how this works. All of the information is not yet available as we go to press.

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