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IBM cuts prices for System i Enterprise, HA servers

Price tags on IBM's System i enterprise edition and High Availability (HA) servers are aimed at the traditional iSeries sweet spot -- the midrange.

IBM today announced discounts on its System i enterprise edition and High Availability (HA) servers, with the most aggressive cuts (10-20%) aimed at the traditional iSeries sweet spot -- the midrange.

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Effective May 2, IBM i5 550 Enterprise editions, previously $270k, are now $220k; comparable reductions also apply to the 550 Solution (-$40k), Oracle/JDE (-$39k), C2CRM (-$38k) and HA (-$50k) editions.

IBM System i product manager Ian Jarman said supporting the platform's ISVs, such as SSA, Global, SSP, Oracle, and Intentia, were a big reason for dropping prices, alongside generally wishing to ease the pain of longtime users with old boxes wanting to upgrade.

"The cost of moving forward, which we've found to be an inhibitor in the past, we're trying to ease that," Jarman said, adding that rebates have also generally been increased, previously ranging from $750-85k, now $1,750 to 135k. "A lot of our ISVs have been with our system for a long time, and we want to encourage and help them…They came to us and said we want to modify that. The rebates are now larger because those five ISV solutions generally run their business."

Two to four-way 570 Enterprise models, previously $449k, are now $349k, with similar drops on 4/8 and 8/16 way 570 models. The 2/16 way 570 CBU is $295k, down from $365k (-$70k).

Price cuts by percentage on the higher-end 595 servers were lower, from 4-10%; for example the 32/64 way 595 Enterprise, previously $2,855,000, is now $2,615,000 (-$240,000, or -8%).

System i revenue dropped the last two quarters, and the platform is trying to get traction by bringing traditional customers back on board. Analysts say lowering prices is not uncommon six to eight months following a product release, which is the case for these servers, the first group introduced with power 5+ chips.

"I would think this has been in the playbook for a while, but certainly the last couple of quarters have been disappointing for iSeries sales," said Charles King, research director at Pund-IT Research in Hayward, Calif. "So there may have been pressure to reduce prices."

Let us know what you think about the story; e-mail: Joe Spurr, News Writer

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