A new product line is a very disruptive thing, but the eServer i5 line launch is perhaps even a bit more tricky because of the need to align pricing with the eServer p5 servers that are based on the same Power5 platform and IBM Corp’s desire to do better in selling OS/400 servers during the third quarter than it did during the second quarter, when sales were down 28%. To that end, IBM tweaked iSeries and i5 prices yet again, at the end of July.
IBM first of all cut the price of its Integrated xSeries Adapter card (which is used to link xSeries servers to iSeries machines for shared data storage) by 21% to $2,200. IBM also formalized the price cuts on two features of the i5 Model 520 servers (the feature 7456 Standard Edition and the feature 7457 Enterprise Edition).
Pricing for i5/OS V5R3 remains the same for the six other regular i5 machines (as distinct from the five i5 Model 520 Express configurations). These price changes are consistent with the pricing that IBM announced on July 13. IBM also raised prices on some rack components by 20%.
Perhaps more significant, IBM has slashed the cost of upgrades for some key features within the prior two iSeries generations of Model 8XX servers. These price cuts suggest that some customers are hesitant to move to i5/OS V5R3, which is required on the i5 Model 520 and 570 servers, and that IBM and its vast reseller channel are trying to get rid of the V5R2 systems and upgrades in the channels.
Generally speaking, the price cuts cover upgrade charges for specific interactive processing features used in the first generation Model 8XX servers (820, 830, 840) as they are upgraded to second-generation Model 8XX servers (Model 810, 825, 870, 890) with OS/400 V5R2 Enterprise Edition. These upgrade price cuts are quite substantial, ranging from 11% to 61% and averaging 36%, and they take effect immediately.
IBM also announced at the end of July that the upgrade from processor and interactive features used in the first-generation Model 8XX to OS/400 Enterprise Edition running on second-generation Model 8XX would be withdrawn from marketing on September 30.
On November 19, IBM will stop selling the 128MB and 256MB main memory cards used in iSeries machines, as well as the feature 4778 PCI RAID 5 disk controller. A whole slew of feature conversions for these older Model 8XX boxes are also going to be removed from marketing on November 19. You can see what those features are on IBM’s Web site.