Big Blue Backs Off On IBM i Maintenance Price Hike

March 18, 2013 Timothy Prickett Morgan

Well you lose some, and every now and then, you win some. Or more precisely, we all win some. Back in the February 25 issue of The Four Hundred, I told you about an announcement buried deep in Big Blue’s February 5 Power Systems announcements that had some pretty steep price increases for selected features of the IBM i operating system. Well, on March 11, IBM rescinded that price increase, after what I presume was a lot of complaints from customers, business partners, and wiseguys like me.

As I explained nearly a month ago, these IBM price change announcement letters are pretty badly designed, and when it involves Software Maintenance features, it was particularly hard going through the IBM product catalog and announcement letters to even figure out what the heck had its prices changed. But after many hours of suffering, I found enough historical data to figure out what on earth announcement letter 313-006 was raising prices on and created a monster table explaining it to all of you. Basically, IBM was jacking up the base Software Maintenance fees for IBM i 6.1, 6.1.1, and 7.1 by 23.1 percent to a high of 28.6 percent, and then boosting the prices to goose the coverage or move between software tiers. The price change was set to kick in on April 16.

Well, in announcement letter 313-023, IBM issued this small statement: Effective immediately, announcement letter number 313-006, Price change(s): IBM System i selected software maintenance features, has been withdrawn.

No further explanation was offered. Nothing to see here, move right along. . . .

IBM’s position was that it bundles maintenance services and support for the 45 products that it sells to run on top of IBM i in the operating system support, and it wanted to get closer to the 20 to 25 percent that companies charge–or rather try to charge–for support. This seems silly, and I said so. What IBM should be doing is charging explicit support for the underlying operating system and the database management system separately, and then charging separately for those 45 products and their own support. What is so hard about being charged for what you use? If IBM thinks its maintenance prices are too low, most of us think its software prices are too high, especially considering the very deep discounts that AIX and DB2 customers enjoy (particularly if they are coming into the IBM fold from another platform) as well as PowerLinux system customers are presumably getting as IBM tries to compete with X86 iron.

But in the real world, when you rely on a proprietary system that is easier to patch and use, and is hard to replace, you will end up paying a premium of some kind. The question I have now is this: What will IBM try next? I am not going to say anything and give Big Blue any ideas or jinx it. Nothing to see here, move right along. . . .