IBM to cut prices on z/OS software by up to 30 percent

IBM said Tuesday it is dropping prices on its z/OS mainframe software by up to 30 percent for certain categories of users and introducing changes to its Workload License Charge (WLC) model in response to long-standing user demands.

Effective July 1, corporations with large mainframe installations -- 5000 MIPS or more -- will see z/OS software prices drop by 30 percent, while those with more than 3300 MIPS will see z/OS-related middleware prices rolled back by 20 percent, said Peter McCaffrey, a director with IBM's zSeries group.

IBM is also making some important tweaks to its WLC software pricing model. One of the most significant relates to the way z/OS workloads are measured for pricing purposes. Under the existing model, users must define the system capacity they think they'll need to run a particular workload. Usage is then measured using a four-hour rolling average.

Users in general have liked the approach and said it is far more equitable than previous capacity models in which users paid for software based on the overall size of the system.

The problem, however, is that if the average usage in a four-hour period exceeds the licensed capacity, the result can be performance degradations and unwanted software bills.

"Further, there were many installations where the sum of the defined capacities was larger than the size of the machine," said Al Sherkow, president of I/S Management Strategies Ltd. in Whitefish Bay, Wis.

In such cases, pricing was based on the overall size of the machine resulting in no cost savings, Sherkow said.

Under the changed model, users won't have to define any capacity upfront but will be charged based on actual average use over a four-hour period. Users can still opt for a defined capacity model if they choose, McCaffrey said.

Instead of having to work under a fixed migration schedule, corporations can also choose when they want to move from IBM's existing Parallel Sysplex License Charge (PSLC) model to the WLC, McCaffrey said.

"We are improving our software pricing options in a way that we think will deliver more flexibility, choice and additonal value for our high-end customers," McCaffrey said.

More corporations can expect to see cost-savings as a result of the changes, Sherkow said.

But "the changes do not decrease the need for installations to implement software capacity planning as an extension to their hardware capacity planning," he added.

Meanwhile, on the hardware front, IBM also introduced faster processors across its line of z900 servers to boost price/performance. The company offered 16 new models of its z900 mainframe systems offering up to 20 percent greater performance than current models.

The company is also offering a new option called Customer Initiated Upgrade, which makes it more efficient for customers to upgrade their hardware, McCaffrey said.

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