Big Blue Tweaks IBM i Pricing Ahead Of Subscription Model

June 27, 2022 Timothy Prickett Morgan

Back in May, Big Blue said that it was going to be simplifying the IBM i stack ahead of a move to subscription pricing for systems software as well as hardware that runs it. To do that means zeroing out prices for a slew of things that had price tags on them formerly.

In announcement letter 322-406 on June 1, IBM made good on that promise to move a bunch of software from “separately charged” to “entitled with IBM i status, which we outlined in our coverage on May 16. The news here is not just that IBM followed through on this, but that we get a glimpse of the prices IBM is charging for a bunch of systems software add-ons for the IBM i platform, so we know what used to be charged and we also now know the inherent value IBM is adding into the IBM i stack as it seeks to move customers to subscriptions instead of perpetual licenses.

And by the way, you don’t have to buy subscriptions to get the free entitlement for these systems programs – this is just how IBM i is bundled now. This chart sums up the changes:

As we explained back in May, the columns on the left of this chart are those that were separately until June 1, including add-ons for application and database threading (SMP), high speed printing and fonts, HA subsystems, performance tools, and job scheduling, which were previously licensed separately and charged for separately. But now the items in the column on the right are all of the Licensed Program Products (or LPPs in the IBM lingo) that will have a separate price tag above and beyond the IBM i license. Customers or their business partners will have to ask for the now-free software to be added to their machines – they are still separately orderable, not automagically installed on machines.

The cost of the entitlements prior to this pricing action were from $50,000 to $200,000 for all of the features, according to Alison Butterill, product offering manager for IBM i. Now, you can look for yourself because there is a spreadsheet that covers all of the price changes and you can see what you were paying before. (Pricing information on the IBM i platform is hard to come by, which is why we are sharing it with you.) For instance, the InfoPrint print server cost from $795 on a P05 machine to $9,995 on a P50 system. Performance Tools cost from $455 on a P05 system to $13,650 on a P60 machine (that tier has been eliminated on everything but very old but big at the time NUMA machines). HA Journal Performance ran from $500 to $15,000 on the same machines. The i Access Family client integration software cost from $2,750 on a P05 system to $82,500 on a P60 system. And so on.

The zeroing out of pricing for these LPPs was effective immediately on June 1. If you were in the middle of acquiring an IBM i license and these features had charges, you should really reach out to IBM and your business partner to see if you can’t get a little pricing action of your own. . . .

In addition to these price cuts on IBM i LPPs to zero, IBM also said in announcement letter 322-407 that is was increasing prices on Software Maintenance for IBM i for two, four, and five year terms. The pricing for single-year terms do not seem to be effected, and only machines in the P10, P20, and P30 tiers are affected and that is because there are no Power8, Power9, or Power10 machines in the P40, P50, and P60 software tiers. In effect, IBM’s price increases on multi-year Software Maintenance contracts for IBM i is not so much a price increase proper, but a reduction in the discount levels that IBM is giving for prepayment of multiple years for the Software Maintenance services.

Inflation is a bish, and all IT vendors are trying to walk the fine line between covering costs and losing business. Prices on two-year, four-year, and five-year contracts for P10 machines rose by 12 percent, for P20 machines rose by 16 percent, and on P30 machines rose by 20 percent. But the base one year contract prices, which we outlined in detail three weeks ago, remain unchanged.

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