IBM Tweaks Some Power Systems Prices Down, Others Up

March 27, 2023 Timothy Prickett Morgan

Back in September and November of last year, with inflation running a bit crazy, IBM raised prices on selected Power Systems hardware and software with the price changes taking effect on January 1 this year. We went into the details back then, of course, but we are being proactive in looking for any price hikes that might come out of Big Blue relating to its Power Systems machines, systems software, and related storage and networking. And, as it turns out, there have been some more pricing actions that you need to be aware of.

As we have pointed out in our coverage from last year, given the inflationary economic environment, it is amazing to us that IBM has not just done a blanket increase in all hardware, software, and maintenance costs rather than making such piecemeal changes as it has been doing. When economic difficulties have set in during past eras, IBM waited as long as it could and then made broad-stroke price hikes when it was inevitable that costs were rising faster than revenues – or that revenues were going to soften. As we said last fall, the price hike must be baked into the Power10 and System z16 platforms already for this to be the case, but we also have to point out that raising prices on older gear has the same competitive pressure as having (relatively) lower prices on new gear.

In any event, in announcement letter 323-580, which came out on February 23, IBM actually cut prices on some features in the Power L1022 and Power L1024 servers, which of course are based on the “Cirrus” Power10 processor. (We did a detailed analysis of the Power S1022 and its Linux-only variant, the Power L1022, which is popularly used as a platform for applications employing the SAP HANA in-memory database, back in August 2022, and did a separate analysis of the Power S1024 and its Linux-only equivalent, the Power L1024, separately that same month.) In this announcement, IBM cut the cost of 256 GB memory features in the SAP memory bundle for the Power L1022 by 31.1 percent to $6,199 and the cost of the 512 GB memory features for this machine were dropped by 13.3 percent to 15,599.7. On the beefier Power L1024 machine, the essentially the same 512 GB memory modules used to cost the same ($17,998) as those on the Power L1022, but now with a 6.7 percent discount they cost more on the Power L1024 at $16,799. The 1 TB memory features, which used to cost $57,398 a pop, now are 8 percent cheaper at $52,799.

What we find interesting here is that the Power10 memory is considerably more expensive as the modules get fatter – which is not unusual, of course, but rather a factor in yields for memory chips. Fatter memory has lower yield, and therefore it is more expensive per unit if capacity. After the price changes, the 256 GB module under the SAP memory bundle costs a little more than $24 per GB, the 512 Gb modules cost $30.50 or $33 per GB (depending on the machine), and the 1 TB module costs $51.60 per GB. The cost per GB is more than 2X for modules that have 4X the density. Which is why you always fill all memory slots with the skinniest memory you can get away with. That way, you get maximum bandwidth while minimizing the memory capacity cost to get there.

In this same announcement letter, IBM has cut the price of a two-port 16 Gb/sec Fiber Channel adapter that plugs into a PCI-Express 3.0 slot (or that arbitrates down to the bandwidth in PCI-Express 4.0 or 5.0 slots) by 37.1 percent to $2,059. A four-port 16 Gb/sec Fiber Channel adapter (also a PCI-Express 3.0 device) were chopped by 61 percent to $2,639, while a two-port 32 Gb/sec Fiber Channel adapter (likewise a PCI-Express 3.0 device) were cut by 39.4 percent to $2,799. Clearly, IBM wants to make SAN storage more appealing to customers of these entry Power Systems machines and also to keep that SAP business on the Power platform growing.

On March 1, IBM cut prices on the flash core modules in its FlashSystem 7300 all-flash arrays. The 4.8 TB NVM-Express flash now costs 8 percent less, the 9.6 TB module costs 11.5 percent less, the 19.2 TB module costs 8 percent less, and the 38.4 TB module costs 7.1 percent less. List prices were not divulged.

In announcement letter 323-576, dated February 14, IBM is raising the price on its Cloud Management Console, which was announced back in May 2017 and which was last tweaked along with other Power Systems software back in August 2022. The price of the Cloud Management Console depends on the bundle – sometimes it is rolled into AIX Enterprise Edition, sometimes it stands free or is bundled in other ways – but the price increase is the same across all distribution bundles, up 50 percent effective on March 15.

In announcement letter 323-575, also dated February 14 and effective March 15, IBM is raising the Machine Control Program Remote Support (MCPRS) for the Hardware Management Console for Power Systems iron by 20 percent to $300 a year per system, and upgrading to 24×7 support adds another $105 per year, up 21 percent.

And a reminder of something we missed back in November: In announcement letter 323-538, IBM is raising prices on various storage software – file systems, management tools, and such – on a wide array of its storage arrays as well as for its XL compiler and Rational Developer development tools by between 19 percent and 24 percent. These changes, which vary by currency in Europe, Africa, Canada, and Japan, were announced on November 22 and we did not see this at the time. They were effective January 1, and superseded price changes on some of these products that were effective in September 2022.

Not to jinx anything, but all things considered, the fact that IBM is cutting some prices to better compete against X86 platforms is a good thing, and that it has not done that blanket price increase (not just a currency harmonization as it did last year) is an even better thing because it is cutting IBM i shops a break they might not otherwise have.

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