IBM takes steps to relieve iSeries pricing pain

IBM Corp. this week will roll out new hardware, pricing and upgrade options for users of its iSeries systems as part of a US$500 million effort to revitalize the 25-year-old midrange server line.

The overhaul is aimed at addressing several long-standing user concerns while also making the iSeries machines more appealing to first-time buyers, said Al Zollar, who earlier this month was tapped to head the iSeries business unit at IBM. In addition, IBM plans to invest more in marketing in an attempt to boost interest in the iSeries technology among software vendors and resellers, Zollar said.

Perhaps the most important development, according to users and analysts, is a change in the way IBM charges users that run host-based green-screen applications on machines in the iSeries line, which was previously known as the AS/400.

Under IBM’s new Enterprise Edition pricing model, companies will be charged flat fees, varying by model, that let them use the full capacity of their machines for running 5250 terminal sessions.

The approach replaces a complex and very unpopular pricing scheme under which IBM charged iSeries users an “interactive workload” fee for running 5250 applications. The multitiered pricing structure ensured that users paid progressively higher fees with almost every increase of their interactive workloads.

Ian Jarman, an IBM product manager, said Enterprise Edition pricing could improve price/performance on the iSeries line by up to 80 per cent in some cases. That’s because the new pricing allows users to use the full capacity of the system for running interactive applications, without paying anything extra for it, as they would have otherwise.

Some iSeries users welcomed the change.

“It’s about time they did this,” said Brendan Carlton, a DeSoto, Kan.-based spokesperson for Huhtamaki, a maker of packaging materials with headquarters in Espoo, Finland. “It concerned me a lot that they were charging me additional dollars for running an interactive workload.”

For example, when Huhtamaki upgraded from a smaller iSeries system to the high-end i890 last year, the company had to fork over an additional US$500,000 for its 5250 requirements alone, Carlton said.

Along with the pricing changes, IBM will announce four new iSeries models, including a pair of systems that are based on its Power4 processor and will join the i890 at the high end of the server line.

The i870 and i825 come with a capacity-upgrade-on-demand feature that lets users switch on additional processors when they need them and turn them off when they are no longer required. For example, a company could turn on an extra processor in an i825 and pay a fee of US$1,100 for each day it’s used, Jarman said. They could also buy the additional processor outright for about US$50,000, he added.

The temporary upgrade capability would let users quickly access additional CPU capacity without having to shut down a system or reconfigure it, Carlton said. He noted that Huhtamaki had to take its iSeries systems off-line for nearly 20 hours the last time it did a capacity upgrade.

IBM said its new eServer iSeries models will be available on February 21, 2003.

More information about the company’s upgraded systems can be found on its Web site at

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