IBM System z Software Price Changes

Just in time for next year’s budgeting—actually maybe a few months late—IBM announced software price increases for monthly Flat Workload License Charges (FWLC) on over 1000 (1087 to be specific) IBM System z software products. You can check the announcement and the entire list of products here. The announcement is dated Oct. 30, 2012; price increases take effect July 1, 2013.

The price increases generally appear to run about 10%. Individually, none of these look like big money. But nobody likes a price increase.

For those inclined to complain, as IBM explains in its announcement; the Flat Workload License Charges (FWLC) software pricing metric applies to select products not eligible for sub-capacity pricing. Instead it charges one simple flat price per product per eligible server and is independent of server capacity. Since FWLC was introduced IBM brought out five generations of new System z servers. Over that time period the capacity of the largest server available has grown to more than 20x greater than the original IBM zSeries. These generation-to-generation capacity increases have enabled the FWLC software metric to deliver significant price performance benefit over time for customers who upgraded to larger systems.

That certainly is apparent in the latest zEC12. As DancingDinosaur reported on the zEC12 introduction back in August: with a 5.5 GHz core processor (up from 5.2 GHz in the z196) and an increase in the number of cores per chip (from 4 to 6) IBM calculates it delivers 50% more total capacity. By configuring the zEC12 cores as specialty processors you will see a 20% MIPS price/performance boost.

The FWLC products typically are older products running on older machines. These users typically don’t want or need the bells, whistles, and performance kick they might get with new products running under a different IBM licensing scheme, such as Advanced Workload License Charges (AWLC) and Advanced Entry Workload License Charges (AEWLC) intended for smaller z114 machines.  The price increase is IBM’s not too subtle way of saying it is time for you to consider upgrading.

So if you want to avoid the July price increase, you might consider a new z. There is no z114 equivalent, what used to be called a Business Class machine, for the zEC12 yet, but there may be one by July. (If history serves as a guide, the z114 followed the z196 intro by about a year.) If not, just get a z114. Then you can switch to AEWLC licensing.  If you go the zEC12 route at least there is an improved software licensing curve that should ease some of the pain. I hope no organization will abandon the z completely just because of a 10% FWLC price increase, but who knows.  At least they should perform a full TCO analysis before they do.

If you are going to upgrade your z you might consider running more and, most importantly, new workloads on it too. This will enable you to lower your overall cost per workload. It also will make you eligible for a z Solution Edition discount, which offers IBM’s best deal but definitely comes with some serious constraints and licensing complications of its own. Make sure to read and understand the fine print.

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