IBM i licenses, part 3: can the hardware bundle be cheaper than a smartphone?

June 27, 2022

Timothy Prickett Morgan

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

Let me ask it another way: which will be more expensive: provide a business user of an IBM i system with a seat, with a complete set of hardware and system software, or provide an iPhone 13 Pro Max with a data plan and mobile service for every 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 discovering it.

Let’s talk about iPhone 13 Pro Max first because we know all the details about what it costs. I still use my iPhone X, but because I paid off my device as soon as I funded it several years ago, I’m eligible to upgrade to the iPhone 13 Pro Max through Verizon, the only carrier that works well in the West North carolina. The MSRP of this shiny new phone, with 128 GB of flash storage (scalable up to 1 TB!). the Super Retina XDR display, a 6.7-inch screen and 28 hours of video playback and 95 hours of audio playback on battery, a great set of telephoto cameras, costs $1,100. (Well, technically it’s $1,099.99, but that’s a stupid price for something, so I’m going to throw them the penny, which costs 2 cents in copper, because sometimes the world just doesn’t make sense here in the 21st Century. But let’s ignore that for now.) That works out to $30.55 a month for 36 months to fund it, with 0 percent APR funding. (Not everyone can get that, I guess.)

If you currently add a new line from Verizon on this device and trade in an old machine, you can get up to $800 off the cost of the iPhone 13 Pro Max, and if you switch from other carriers like AT&T and T-Mobile and you pay off the phone monthly (thus effectively promising to stay with Verizon for at least 36 months, a sort of reserved capacity plan on its network), you can get a $200 gift card on top of that. These are pretty nice deals. I love my iPhone X and I don’t like switching phones or PCs so I’m not tempted by a deal. If I run out of storage space or if Apple starts messing with my line speed, I move.

Under my current Verizon plan, where I somehow have unlimited data, it costs me $20 for a line plus $15 for Global Calling Plus and another $4.99 for the Verizon Smart Family add-on for parental controls – why I put parental controls on my own phone , which to my knowledge I never activated for any of the lines on my account, I don’t know. But this just proves that people don’t read the cable or phone bills, and they don’t read the monthly system bills so carefully and suppliers know that. Anyway, add it all up and for just $79.21 a month, I can get myself 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 quick on holidays and birthdays because no one could pay the phone bill if the long distance rates were too high. In college I sometimes 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, although I could afford a top-of-the-line Ford F-150 Lightning pickup with what I pay for phone and cable for my family every month.

Based on what we know about subscription pricing for the IBM i stack, which we discussed on June 13th, in the P05 software tier, over a three-year period, it costs $12,105 for software licenses that cover 25 places. That includes access to the software and Software Maintenance for updates, which equates to $13.45 per month per seat for the system software. When you put it like that, it doesn’t sound like much, does it? My data plan on my phone – which is the analogy to a software license – costs 3.6x as much.

So what will the monthly hardware and maintenance costs for an entry-level Power S1014 cost? We don’t know, but we got a little bit more wind of IBM’s thinking about IBM i software hardware maintenance subscription pricing, which the company first got into during these May 3 announcements.

We covered all the reasons for doing this until we were blue in the face, and we think this will be a wildly popular option for many small and medium-sized businesses with modest capacity needs, but clear preferences for preserving capital and preserving IT. off balance.

You will notice that there are no prices in the chart above. But let’s work it backwards. To match the monthly cost of an iPhone platform, we have $65.76 per seat per month to play with after paying $13.45 per seat per month for three years of the IBM i license.

We’re not too sure that the hardware will depreciate over a three-year period, and we think it will probably be at least five years, but just for fun, let’s see how it works in 36 months. Let’s say a configured P05-class Power S914 system with 64 GB of memory, a 1.6 TB flash drive, four 283 GB drives, and a four-port 10 Gb/sec Ethernet controller costs $23,509. †You can play with the IBM i configurator for this machine here.) So assume IBM will charge a small fee for a Power10-based Power S1014 machine. Call it $25,000. That works out to $27.78 per IBM i-seat per month. Add to that the $13.45 per seat per month for the IBM i subscription, and you’re talking $41.23 per seat per month. Give IBM some extra money for using its balance. Call it $50 per seat per month. Or even $60, or even $75.

Whatever.

It’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 upgrade the Power S1014 configuration to push the price up to $75 per seat per month, it won’t be a tough sell for the CFO or business owner. If you walk into the conference room and ask $67,500 to buy a new system, $14,295 for a perpetual license and three-year software maintenance for the IBM i stack and the remaining $53,205 for its hardware and maintenance. , they go to him and ha until the disk drives on your current system fail.

It’s not the money that makes them nervous, it’s the upfront money that does. Why shouldn’t the cost grow with the benefit as it is used? That’s the real advantage of the cloud, even if you build one in your own data center.

It is quite conceivable that the hardware software maintenance bundle costs less per IBM i-seat than a premium smartphone. At that point, everyone can stop complaining and continue to modernize.

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