IBM's New pSeries Servers: More Power, More Flexibility Page 2

By Kevin Reichard (Send Email)
Posted May 6, 2003

Indeed, the pricing of the entire new midrange line may end up being the biggest story for current and potential customers. IBM will offer customers to turn CPU and disk capacity on and off based on need; in addition, customers will be entitled to free test drives of the expanded capacity, as well as pay for the expanded capacity on a hourly system.

"Our big enterprise customers have been asking for better ways to plan their budgets, and this seemed like a good way to honor those requests," McGaughan says.

Basically, the capacity on demand allows customers to activate processors when needed and turned off at other times. The capacity can be temporary or permanent and is offered on the p690, p670 and p650 series, according to McGaughan.

"For any company, data-processing dollars need to be spent on those microprocessors they will use," Day says. This sort of pricing model lends itself well to companies looking to consolidate their servers and get away from a one-server, one-app model.

The pricing is not divided equally over all the CPUs, he added. To take a hypothetical example, let's say your enterprise purchases a 16-way server, but want only 8 CPUs active. In this case, the base pricing wouldn't be based on you paying for 50 percent of the total cost of the CPUs, but rather 60 percent. To activate four more CPUs, you'd pay 20 percent of the total cost of the CPUs. You can activate the CPUs on an as-needed basis. They can also be based on per-day usage, similar to a prepaid phone card or a debit card. If you need to light up 8 additional processors for only two days, you'll buy a feature code for 60 days and then IBM will debit your usage (in this example, the equivalent of 16 CPU days). The other advantage to this sort of system: expanded capacity becomes an operating expense and not a capital expenditure.

"We do not do anything intrusive at all," McGaughan says. "We will send back information about the usage. When a customer reaches the end, we tell them their resource is expiring. When they next boot the machine, we will deallocate it."

Similarly, a memory on demand capability allows customers to install features with unused memory capacity that can be activated in 4GB increments.

"I would expect that half of our customers will take advantage of either one of these options at some time," McGaughan says. "They are very affordable."

And perhaps in the ultimate harbinger of things to come, IBM plans to price software like DB2 and Tivoli on demand as well, although those plans have not been finalized.

Day says that IBM's pricing plans could lead to how other firms price software -- as well as change the dynamics in the UNIX server space.

"IBM has the ability to be the first to offer virtual pricing on their own products -- Websphere, DB2, etc.," he says. "If it works, HP has to convince BEA and Oracle to join this pricing model. This will test alliances with one another."

Page 2 of 2

Comment and Contribute

Your name/nickname

Your email

(Maximum characters: 1200). You have characters left.



Thanks for your registration, follow us on our social networks to keep up-to-date