IBM Hardware, Software, And Support Prices Hiked

April 8, 2024 Timothy Prickett Morgan

Last fall/summer we caught wind of the fact that IBM was going to raise prices on hardware and software effective this year, and then we never saw the announcement letter from Big Blue on General Price Harmonization or the one on price increases relating specifically to Power Systems and IBM i.

As it turns out, those announcements were made on September 1 last year and they went into effect on January 1 – something that was not apparent to us (or the business partners that we talk to from time to time) until we were reviewing the subscription pricing deal that IBM announced last week and that we cover in the lead story in this issue of The Four Hundred. We noticed that the perpetual license and subscription license prices were both higher than they were when we did our analysis of IBM i subscription pricing back in February 2023.

The first announcement, called General Price Harmonization (GPH) for IBM Passport Advantage and Passport Advantage Express, was outlined in announcement letter 324-653. There is an accompanying spreadsheet that has 27,378 lines of software feature and name numbers for products that have had a price change. What we were told when we spoke to IBM back in the summer of 2023 is that we should expect something on the order of a 6 percent price increase, which was intended to cover the higher costs that Big Blue is paying employees that support its products and changes in currency exchange rates between the United States and the other 170 countries where Big Blue does business. What this announcement says specifically is this:

“For most products, the following price harmonization changes will apply: 6 percent increase worldwide. For a small number of products, price harmonization adjustments will deviate slightly from the assumptions above. In some cases there will be a higher price increase or a price reduction, but overall most of the price changes will not exceed plus or minus 5 percent.”

Then there was a companion price change, with the cryptic title Price Change(s): Select Power Storage HW SW Action, in announcement letter 324-671 dated September 1, 2023 and taking effect on January 1, 2024 as well. This announcement did not, as we read at the time, cover the price increase on the hardware and software in Power-based storage subsystems, but in Power products and in Storage products for both hardware and software. We read it wrong, saw the accompanying spreadsheet with DS8000 series storage array price changes, and promptly ignored it.

There were other tabs in the spreadsheet, which we now see, and which include a 6 percent price hike on Power E1080 base servers and a few select features. There was another tab called Storage SW that listed a slew of storage software and Software Maintenance for it, but no percentage increases to tell us what the price changes were. And finally another tab called Power SW that showed a 10 percent increase in IBM i per-core annual and monthly subscription prices as well as 10 percent increases in Software Maintenance for IBM i perpetual licenses. Perpetual licenses for IBM i, BRMS, Rational Developer Studio for i, Rational Developer for i, Db2 Mirror, PowerHA, and Cloud Connect. The PowerVM hypervisor, The PowerVC implementation of OpenStack, and the PowerSC security software all saw 6 percent price increases, too, and so did the AIX variant of the Unix operating system for Power machinery.

Sorry about missing those. It was the Labor Day holiday, and there was a lot of stuff going on at that time.

One last thing: Get used to a price increase of 10 percent per year on Software Maintenance. IBM wants to move the customer base to subscriptions, and it is not going to keep the price of SWMA down. It is going to make it painful to stay on SWMA so you will move to subscriptions and to more recent IBM i releases. Ditto for AIX.

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