Aug 3 ’17

New Software Pricing for IBM Z

by Alan Radding 

One of the often overlooked benefits of the introduction of a new mainframe like the Z is cost savings. Even though the machine may cost more, the cost of the performance and capabilities it delivers typically cost less on a per-unit basis. In the case of the new Z, it’s not just a modest drop in price/performance. With the new Z, IBM announced three new Container Pricing models for IBM Z, providing greatly simplified software pricing that promises flexible deployment with competitive economics vs. public clouds and on-premises x86 environments.

Here are the three biggest software pricing changes:

The container pricing options are designed to give clients the predictability and transparency they require for their business. The pricing models are scalable both within and across logical partitions (LPARs) and deliver greatly enhanced metering, capping and billing capabilities. Container pricing for IBM Z is planned to be available by year-end 2017, and enabled in z/OS V2.2 and z/OS V2.3

Jones introduced the software discounts by reiterating that this was focused on software Container Pricing for IBM z and promised that there will be a technology software benefit with the z14 as there was with the z13. IBM, he added, will offer a way to migrate to the new pricing; “This is a beginning of a new beginning. Clearly, as we go forward, we want to expand what’s applicable to container pricing.” His clear implication is that IBM is intent on expanding the discounting it started when, several years ago, it introduced discounts for mobile transactions running on the z, which was driving up monthly software cost averages as mobile transaction volume began to skyrocket.

To understand the latest changes, you need to appreciate what IBM means by container. This is not just about Docker containers. A container to IBM simply is an address space.  An organization can have multiple containers in a logical partition and have as many containers as it wants and change the size of containers as needed.

The fundamental advantage of IBM’s container pricing is that it enables co-location of workloads to get improved performance and remove latency, thus IBM’s repeated references to line-of-sight pricing. In short, this is about MLC (4hr) pricing. The new pricing eliminates what goes on in container from consideration. The price of container is just that; the price of the container. It won’t impact the 4hr rolling average, resulting in very predictable pricing.

The benefits are straightforward: simplified pricing for qualified solutions and allowance to deploy in the best way. And IBM can price competitively to the customer’s solution; in effect solution-specific pricing. When combined with the new metric-payments pricing, IBM is trying to put together a competitive cost/price story. Of course, it is all predicated on the actual prices IBM finally publishes. Let’s hope they are as competitive as IBM implies.

I never pass up an opportunity to flog IBM for overpricing its systems and services. From discussions with Jones and other IBM managers during the pre-launch, it appears the company may finally understand the need to make the mainframe, or z, or Z, or whatever IBM calls it, price-competitive on an operational level today. Low TCO or low cost of IOPS, or low cost of QoS is not the same.

This is especially important now. Managers everywhere appear to be waking up to the need to transform their mainframe-based businesses, at least in part, by becoming competitive digital businesses. I never imagined I would post something referencing the mainframe as a cost-competitive system able to rival x86 systems, not just on quality of service, but on cost. With the IBM Z, the company is talking about competing with an aggressive cost strategy. It’s up to you, paying customers, to force them to deliver.