Big Blue Offers Cheaper Standard Shipping For IBM i Systems
July 10, 2023 Timothy Prickett Morgan
Since the dawn of time, one kind of shipping and handling was bundled into the price of AS/400 and successor systems. But that has just changed. Now, Big Blue is offering two tiers of shipping and handling for machinery it ships to customers, including Power Systems servers and current in its IBM Storage lineup of tape, disk, and flash products – and it is giving the customers a choice on how they want things shipped and therefore what price they will pay.
This change was inevitable, and frankly, given the high costs of shipping anything these days, it is amazing that it has not happened already.
As we are all keenly aware, shipping costs have skyrocketed since the coronavirus pandemic struck – with the exception of Amazon Web Services. Jeff Bezos has a boot on the neck of UPS, which can’t afford to lose the AWS account but which also can’t afford the artificially low pricing that the AWS Prime deliver service has – it isn’t really free to do the deliveries even if it is free to the customers – and so UPS had had to raise the price to the rest of us as AWS drives its own shipping costs lower and lower. And, ironically, this also gives Bezo & Co a chance to build up its own distributed warehouses and Prime trucking and aircraft fleets to eventually and completely replace UPS and other shipping partners. Drones come next, we presume.
We have no idea what it might cost to ship an entry or midrange IBM i system all loaded up and ready to be plugged in, but it cannot be cheap. What we do know is that in announcement letter AD23-0140, IBM revealed the new two-tiered shipping plan in the United States and in announcement letter AD23-0418 it did the same for its European customers. We think the US bundled shipping expired in May and we know the European bundled shipping expires this week.
The new Power Systems shipping comes in a Standard tier and a Premium tier for the Power Systems and the type of shipping is chosen at the time business partners or IBM sales reps are completing a build of a system in Big Blue’s eConfig online configuration tool. The new shipping applies to Power9 and Power10 systems and to current Storage products.
“We are changing the way we’re doing shipping and handling,” explains Steve Sibley, vice president and global offering manager for Power Systems, “which we’ve always included in configurations. But the methodology is changing where clients actually get to choose whether they want Standard or Premium shipping, which will streamline our processes and give the clients the ability to pick how they want their system shipped. We’ve already had charges for shipping and handling, so that is not new, but it’ll just look different to a client. Standard is the cheaper option and with this we tell them when we’re going to ship it between standard business hours. With the Premium option, you get it whenever you want it.”
Up until now, everything IBM shipped was essentially at the Premium tier, and now customers have a cheaper option with looser timing.
According to the business partners we spoke to, the big difference when it comes to shipping is if something is on a palette or not, and of course, what the distance is from the IBM facility where the machines are housed. If the machine fits in a box, and it doesn’t weigh too much, it comes the same way other heavy packages come to our homes. This is fairly cheap. If a rack of gear is on a palette, that gets to be more expensive. The range for a system shipped in the United States, they tell us, tends to be between $300 and $1,000 before these changes took effect, with a small boxed machine at the low end of the spectrum and a rack of gear on a palette on the other end. If that was indeed the Premium level, then the Standard option should be cheaper than this.