New Software Pricing for IBM Z

One of the often overlooked benefits of the introduction of a new mainframe like the Z is cost savings. Even though the machine may cost more, the cost of the performance and capabilities it delivers typically cost less on a per unit basis. In the case of the new Z, it’s not just a modest drop in price/performance. With the new Z, IBM announced, three new Container Pricing models for IBM Z, providing greatly simplified software pricing that promises flexible deployment with competitive economics vs. public clouds and on-premises x86 environments.

Working on the new IBM Z

Here are the three biggest software pricing changes:

  • Predictable and Transparent Container Pricing—providing organizations greatly simplified software pricing that combines flexible deployment with competitive economics vs. public clouds and on-premises x86 environments. To IBM, a container can be any address space, however large and small. You can have any number of containers. “Container Pricing provides collocated workloads with line-of-sight pricing to a solution,” explained Ray Jones, VP, IBM Z Software and Hybrid Cloud. With container pricing, Jones continued, “the client determines where to deploy using WLM, z/OS and SCRT do the rest.”
  • Application dev and test—highly competitive stand-alone pricing for z/OS based development and test workloads. Organizations can increase their DevTest capacity up to 3 times at no additional MLC cost. This will be based on the organization’s existing DevTest workload size. Or a company can choose the multiplier it wants and set the reference point for both MLC and OTC software.
  • Payment systems pricing are based on the business metric of payments volume a bank processes, not the available capacity. This gives organizations much greater flexibility to innovate affordably in a competitive environment, particularly in the fast-growing Instant Payment segment. To use the new per payment pricing, Jones added, up front licensing of IBM Financial Transaction Manager (FTM) software is required.

The Container Pricing options are designed to give clients the predictability and transparency they require for their business. The pricing models are scalable both within and across logical partitions (LPARs) and deliver greatly enhanced metering, capping and billing capabilities. Container Pricing for IBM Z is planned to be available by year-end 2017 and enabled in z/OS V2.2 and z/OS V2.3

Jones introduced the software discounts by reiterating that this was focused on software container pricing for IBM z and promised that there will be a technology software benefit with z14 as there was with the z13. IBM, he added, will offer a way to migrate to the new pricing, “This is a beginning of a new beginning. Clearly as we go forward we want to expand what’s applicable to container pricing.” His clear implication: IBM is intent on expanding the discounting it started when, several years ago, it introduced discounts for mobile transactions running on the z, which was driving up monthly software cost averages as mobile transaction volume began to skyrocket.

To understand the latest changes you need to appreciate what IBM means by container. This is not just about Docker containers. A container to IBM simply is an address space.  An organization can have multiple containers in a logical partition and have as many containers as it wants and change the size of containers as needed.

The fundamental advantage of IBM’s container pricing is that it enables co-location of workloads to get improved performance and remove latency, thus IBM’s repeated references to line-of-sight pricing. In short, this is about MLC (4hr) pricing. The new pricing eliminates what goes on in container from consideration. The price of container is just that; the price of the container. It won’t impact the 4hr rolling average, resulting in very predictable pricing.

The benefits are straightforward: simplified pricing for qualified solutions and allowance to deploy in the best way. And IBM can price competitively to the customer’s solution; in effect solution-specific pricing. When combined with the new price metric-payments pricing IBM trying to put together a competitive cost/price story. Of course, it is all predicated on the actual prices IBM finally publishes.  Let’s hope they are as competitive as IBM implies.

DancingDinosaur never passes up an opportunity to flog IBM for overpricing its systems and services. From discussions with Jones and other IBM during the pre-launch briefings managers the company may finally understand the need to make the mainframe or z or Z or whatever IBM calls it price-competitive on an operational level today. Low TCO or low cost of IOPS or low cost of QoS is not the same.

This is especially important now. Managers everywhere appear to be waking up to the need transform their mainframe-based businesses, at least in part, by becoming competitive digital businesses. DancingDinosaur never imagined that he would post something referencing the mainframe as a cost-competitive system able to rival x86 systems not just on quality of service but on cost. With the IBM Z the company is talking about competing with an aggressive cost strategy. It’s up to you, paying customers, to force them to deliver.

DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghost-writer. Please follow DancingDinosaur on Twitter, @mainframeblog. See more of his IT writing at and here.


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