IBM i licensing, part 3: can the hardware package be cheaper than a smartphone?

June 27, 2022

Timothy Pricket Morgan

How many monthly iPhone bills is a Power10-based ingress server worth?

Let me put the question another way: what will cost the most? Provide a seat for an enterprise user of an IBM i system, complete with a full set of system hardware and software, or provide an iPhone 13 Pro Max with a data plan and cellular service to each end user? Both are premium products with premium features.

We don’t know, but as the July 12 Power10 announcements approach, we’re getting closer and closer to finding out.

Let’s talk about the iPhone 13 Pro Max first, because we know all the details of its cost. I’m still using my iPhone X, but since I refunded my device as soon as I financed it several years ago, I’m eligible to upgrade to the iPhone 13 Pro Max through Verizon, which is the only well-functioning operator in the west. North Carolina. The retail price of this shiny new phone, with TKTK, is $1,100. (Well, technically it’s $1,099.99, but that’s a stupid price for something, so I’ll throw the penny at them, which costs 2 copper cents because the world doesn’t make sense sometimes here in the 21st Century. But let’s ignore that for now.) That works out to $30.55 per month for 36 months to fund it, with 0% APR funding. (Not everyone can understand that, I guess.)

If you add a new line at Verizon on this device right now and trade in an older machine, you can get up to $800 off the cost of the iPhone 13 Pro Max, and if you switch other carriers like AT&T and T-Mobile and you pay off the phone every month (and therefore promise to stay with Verizon for at least 36 months, a sort of reserved capacity plan on its network), you can get a gift certificate $200 on top of that. These are very good deals. I love my iPhone X and I don’t like changing phones or PCs so I’m not tempted by any deals. When I run out of storage or when Apple starts changing my line speed, I move.

On my current Verizon plan, where I kind of have unlimited data, it costs me $20 for one line plus $15 for Global Calling Plus and an additional $4.99 for the Verizon Smart Family add-on for the parental controls – why I put parental controls on my own phone, that as far as I know I never activated any of the lines in my account, I don’t know. But that just proves that people don’t read cable or phone bills, and they won’t read monthly system bills as carefully, and the providers know that. Anyway, add it all up, and for just $79.21 a month, I can afford a shiny new iPhone 13 Pro Max and full services.

I remember when you “reached out and touched someone” for $1 a minute and had to talk to Grandma and Grandpa very quickly holidays and birthdays because no one could pay the phone bill if the long distance charges were too high. In middle school, sometimes I had to choose between calling my girlfriend and eating, and I chose the girlfriend. Competition and the advancement of technologies is a real strength. We don’t even think about our phones, even though I could afford a high-end Ford F-150 Lightning pickup truck with what I pay for phone and cable for my family every month.

Based on what we know of subscription pricing for the IBM i stack, which we covered on June 13, in software tier P05, on a three-year term, it costs $12,105 for software licenses which cover 25 positions. This includes access to software and software maintenance for updates, and it works out to $13.45 per month per seat for system software. When you say it that way, it really doesn’t sound like much, does it? My data plan on my phone – which is the closest analogy to a software license – costs 3.6 times as much.

So what is the monthly hardware and maintenance cost for an entry-level Power S1014? We don’t know, but we’ve heard a bit more about IBM’s thinking about IBM i software and hardware maintenance subscription pricing, which the company started talking about in May 3 announcements.

We’ve talked about all the reasons to do this until we’re blue, and we think it will be a very popular option for many small and medium-sized businesses with modest capacity needs but set preferences for preserving capital. and keep the computer. off-balance sheet.

You will notice that there are no prices in the table above. But let’s go back. To match the monthly cost of an iPhone rig, we have $65.76 per seat per month to play after paying the $13.45 per seat per month fee for three years of the IBM i license.

We’re not so sure the hardware will be amortized over a three-year period, and we estimate it’s likely to be at least five years, but for fun, let’s see how it works out over 36 months. Assume a P05-class Power S914 system configured with 64 GB of memory, a 1.6 TB flash drive, four 283 GB disks, and a four-port 10 Gbps Ethernet controller costs $23,509. (You can play around with the IBM i configurator for this machine here.) So let’s assume IBM will charge a slight premium for a Power10-based Power S1014 machine. Call it $25,000. This will equate to $27.78 per IBM i seat per month. Add the $13.45 per seat per month for the IBM i subscription, and you’re talking about $41.23 per seat per month. Give IBM some extra money to use its balance sheet. Call it $50 per seat per month. Or even $60, or even $75.

No matter.

That’s less than the $79.21 per month I’d pay to upgrade to the iPhone 13 Pro Max with my current data plan. Even if you use the extra cash to beef up the Power S1014’s configuration to bump the price up to $75 per seat per month, it won’t be a hard sell to the CFO or business owner. If you walk into the meeting room and ask for $67,500 to buy a new system, including $14,295 for a perpetual license and software maintenance for three years for the IBM i stack and the remaining $53,205 for hardware and its maintenance, they’re going hem and haw until the hard drives fail on your current system.

It’s not the money that makes them nervous, it’s the initial money that makes them nervous. Why shouldn’t the cost stack with the benefit as it’s used? That’s the real benefit of the cloud, even if you’re building one in your own data center.

It is quite conceivable that the hardware-software-maintenance bundle per IBM i seat will cost less than a premium smartphone. At that point, everyone can stop complaining and move on to modernization.

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