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IBM buoys on-demand with new iSeries, payment plan

Putting more muscle behind its on-demand initiative, IBM has a new entry level for its iSeries 810 system and a payment plan that lets users prepay for capacity at a lower rate.

Expanding on a commitment to target small and midsized businesses (SMBs) that it made back in January, IBM announced Tuesday a new entry model to the iSeries 810 server and a more flexible payment option that lets users prepay for on/off capacity on demand.

In addition, IBM said its Windows and Linux integration features are now enhanced with support for Microsoft Windows 2003 and DB2 Universal Database V8 for Linux. IBM also said it will offer increased flexibility for iSeries customers to use selected McData switches and directors, improved performance for ESS customers and improved tape backup performance with support for LTO 2 in IBM 3582 and 3583 tape libraries.

According to analyst Maria DeGiglio of the Robert Frances Group, in Westport, Conn., this is the evolution of the announcement IBM made months ago to deliver on-demand computing, as well as the commitment it made to expand the installed base in the SMB market.

"This is the next step in IBM's road map," she said.

IBM announced Monday on-demand features for its pSeries line of servers and, last month, made a similar announcement about the on/off capacity demand offering on the mainframe. On-demand lets users tap into varying amounts of server power, depending on changes in their demand.

The prepayment plan is good news for large companies that have spikes in processing capacity, such as retail companies with seasonal demands. IBM's new plan offers customers the opportunity to prepay for capacity instead of getting billed monthly for usage. The plan is currently only available on the i825, i870, i890 models.

"For companies that have a good idea of peak times and peak processing times, this is a good opportunity to save money," DeGiglio said. "If you have a handle on your processing, there's an opportunity to save even more by prepaying."

The plan is very similar, in theory, to the prepaid phone card, said Ian Jarman, iSeries product manager. Users pay ahead of time for capacity, at a 25% discount.

For a retail company with seasonal peaks in demand, the prepaid plan, in addition to the on/off capacity on demand, means a potentially huge savings, Jarman said.

"They might expect a peak in business from Thanksgiving through Christmas, for instance," he said. "Using on/off capacity on demand, which they have now, the customer can turn on an additional four processors the day before Thanksgiving, maintain that level over the weekend, then turn it off on Monday."

"Buying up front, instead of being billed monthly, saves you 25%," Jarman said. However, the prepaid plan also gives customers more flexibility in budgeting. For example, a company with a larger second quarter budget can buy the prepaid card and dole the capacity costs out in the more lean quarters.

"Very often, people like to stock up on things when they have the budget," he said.

And unlike phone cards, there's no expiration date.

More flexible server

In addition to its prepayment plan, IBM also announced a new version of the iSeries 810 server.

Essentially, this new offering has new entry or performance points which lets customers using the AS/400 Model 720 upgrade into the Model i810 and i820 and continue to upgrade to higher processing configurations.

The significance is two-fold, Jarman said. First, there's a lower entry price into the i810 -- $55,000 for the Enterprise edition. Second, there are a lot of customers who have an AS/400 720 who are looking to upgrade. Users can upgrade from the 720 -- but only through October of this year.


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