Big Blue Goes After Healthcare With Aggressive Power Systems Pricing

March 13, 2024 Timothy Prickett Morgan

We often gently admonish the vendors in the IBM i market that they have to make news to be in the news and also to do something snazzy, like a special promotion or a price cut to get the attention of customers as well as to stimulate a little business for themselves and their partners. IBM is not excepted from this advice, and is actually doing it – at least for customers in the healthcare industry that run their applications on Power Systems iron.

In announcement letter AD23-0111, dated March 12, IBM has put out a new 24-core Power10 processor module and activation features for it that delivers a machine with up to 48 cores in total at a substantially lower price than the Solution Edition price back in February before this particular announcement and certainly lower than the list price for a plain vanilla Power S1024 without the Solution Edition bundle and its associated and pre-existing discount.

Those 48 cores are housed in four physical “Cirrus” Power10 processors, two per server socket, as we detailed in our architectural deep dive for the Power S1024 machine back in August 2022. And as is true of all Power10 machines, there is a price for buying the processor module and then a supplemental price for activating each core to run IBM i, AIX, or Linux. In this case the lower cost CPUs are available for Healthcare Solution Editions where the machine is running an operational database (ODB as it is abbreviated) or an enterprise cache protocol (ECP) as part of the healthcare application stack.

For those who do not need to expand up to 48 cores potentially, IBM is also putting out a variation aimed at the ODB and ECP software that puts together a pair of 16-core Power10 processor modules – that’s four physical Power10 CPUs across two sockets – for up to 32 cores on the smaller Power S1022 at a similarly discounted price. (Our deep dive on the Power S1022 can be found here.)

And for those who are running ODB software underneath their healthcare applications on the Power S1024, there is an extra deal sweetener. There is a memory bundle for 1 TB of memory, expandable to 2 TB of capacity, at a lower price than the regular Solution Edition, which in turn is cheaper than the regular plain vanilla memory on the Power S1024. There is no memory deal in the healthcare industry for Solution Editions on the Power S1022 in this announcement.

There are several reasons why IBM is being generous with the compute and memory for healthcare in particular. First, IBM wants to aggressively pursue healthcare systems (meaning the hospital and clinic networks) with Power Systems and take away business from X86-based systems. Second, healthcare systems – this time, we mean the actual servers and storage – have wildly fluctuating application peaks and they could use capacity on demand to add capacity when new peaks arise. The announcement letter says that customers can dial it up or down, but of course there is not capacity on demand available on entry Power10 servers, although you can turn cores on that are latent in the machine when you need them. You can dial up compute or memory inherent in the design, but you can’t dial it back down again. (Perhaps this has changed when we were not looking? If so, great.)

As you know, IBM does not provide pricing information much these days, but it did give us a sense of the dramatic price breaks Big Blue is giving as outlined above.

“We can’t provide precise numbers,” an IBM spokesperson told us. “But what we can tell you is that clients can potentially see up to 46 percent lower initial investment comparing the S1024 ODB Healthcare Solution Edition price as of February 2024 versus the new total solution price announced on March 12. Prices include hardware, software, and Expert Care Premium services. Additionally, clients can potentially see up to 81 percent improved performance per dollar considering estimated GREF/sec benchmarks. That compares the S1024 ODB Healthcare Solution Edition price as of February 2024 to the new total solution price announced on March 12. Prices include hardware, software, and Expert Care Premium services.”

The GREF/sec refers to a rate of performance for the EpicCare electronic medical record keeping system from Epic Systems and the Caché database management system from InterSystems. GREF is short for global reference, and it is a measure of work done against that Caché database, which runs on AIX or Linux. As far as we know, the Epic/InterSystems stuff doesn’t run on the IBM i platform, but lots of healthcare systems do have homegrown applications running atop IBM i, and hopefully such discounts are not being reserved for just AIX and Linux. By the way, the EpicCare system is used by enough hospitals and clinics that around three quarters of the patients in the United States are accessing records with this system and the Caché database. This stack was ported to Linux a decade ago, and is one of the big drivers for Power Systems for both AIX and Linux operating systems.

These special deals for compute and memory for healthcare companies will be available on March 22 in the United States, in Canada, and in the Caribbean. We do not know if it is available in other geographies, but it should be if IBM wants to be consistent across its markets.

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