Power8 Systems Added To Long-Running Trade-In Deal

June 16, 2014 Timothy Prickett Morgan

We are getting ready to close out the second quarter, and IBM is in a mood to do a little wheeling and dealing to help move its stockpiles of Power7+ systems as well as the shiny new Power8 “scale-out” systems that came out back in April.

In announcement letter 314-067, IBM has outlined the trade-ins for the new Power8 systems that are available under a deal that was last updated last September and that seems to have been running on again and off again for longer than I can remember. The deal is available to customers who replace vintage Power-based systems as well as competitive RISC, Itanium, and X86 iron from Oracle, Hewlett-Packard, Dell, and Fujitsu.

Under the deal, IBM assigns a maximum trade-in credit based on the machine that customers acquire as the replacement machine. You have to buy specific processor cards and quantities of them to get the trade-in. Then there is a list of trade-in credits for the replaced machines, and you can consolidate multiple machines as part of the deal and drive up the trade-ins until you hit the maximum set by the new box. In many cases, you have to turn in a lot of Power 7XX blades to get a reasonable trade-in credit, which will no doubt annoy customers who feel like they got sold a product that has no future beyond Power7 processors because, well, that is precisely what happened. The trade-ins on rack and tower Power7 machines are higher per unit of compute, and that is very likely because their resale value is higher for exactly the reason cited above.

IBM is offering trade-ins that range from $500 a pop for the Linux-only Power8 server models and from $500 to $2,000 on the other three models in the lineup. These are more or less in line with the trade-ins offered to customers who buy Power7+ machines in the Power 710 through Power 740+ class. Depending on the number and type of processor cards in the systems, the trade-in under the latest update of the deal ranges from $1,000 on a small Power 750+ to $240,000 on a loaded-up Power 795 system. You can trade-in Power5, Power5+, Power6, Power6+, and Power7 and earlier machinery and get the cash back from Big Blue. The deal also covers earlier AS/400, iSeries, and System i servers from the dawn of time, but the rebates are not very high. IBM is offering higher rebates on non-IBM iron, which seems counterintuitive but this is business, after all.

The new rebates took effect on June 11. It is an open-ended deal at this point, but it is obviously also subject to change or cancellation at any time.