IBM Revamps S/390 Software Pricing

Changes Aim to Help Customers Expand Key Applications, Add New Ones

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Somers, N.Y - 29 Sep 1998: ... IBM today announced new software pricing terms and conditions for S/390 customers. These pricing changes can make it easier and more cost-effective for many customers to grow existing workloads and put new applications on IBM's S/390 server while taking advantage of its industry-leading security, scalability, availability and mixed workload support.

Specifically, IBM will standardize on two pricing models for the OS/390 platform -- S/390 Usage Pricing and Parallel Sysplex capacity pricing. Customers will be eligible for any combination of these pricing models, which will be available for both stand-alone S/390 servers and Parallel Sysplex cluster environments. Over the next 18 months, IBM will replace nine software pricing options with these two enhanced models.

IBM today also announced the S/390 New Application Growth Environment designed to make it more economical for customers to deploy new applications on an S/390 dedicated server or in a distributed computing environment. Specific applications are enterprise resource planning, e-business, business intelligence and server consolidation for file and print server workloads.

"Customers are asking us for help in managing the cost and deployment of these business-critical workloads," said David R. Carlucci, general manager, IBM S/390 Division. "With this announcement, our goal is to give customers, on average, price/performance improvements of up to 20 percent a year. Today we're providing an even more compelling case for moving enterprise-class applications to S/390."

"Many OS/390 customers will see significant value from the new pricing options," said Steve Mills, general manager, IBM Software Solutions. "While lowering their costs, they can take advantage of IBM's leading data and transactional systems for deploying new e-business applications or growing existing systems. This announcement allows us to offer IBM middleware that is unmatched in scalability, reliability and global support, with the best price/performance in the industry."

IBM also announced independent software providers -- BMC Software (Houston), Boole & Babbage (San Jose, Calif.), Candle Corporation (Santa Monica, Calif.), Computer Associates, Inc. (Islandia, N.Y.), Compuware (Farmington Hills, Mich.) and Platinum Technology, Inc. (Oak Brook, Ill.) -- support IBM's announcement.

Parallel Sysplex Capacity Pricing

For customers growing their S/390 Parallel Sysplex technology clusters or single systems beyond 1,000 MIPS (Million Instructions Per Second), IBM today announced further price/performance changes with Parallel Sysplex Level C Pricing. These customers will be able to take advantage of a price reduction of 25 percent for each MIPS over 1,000 if they choose to use any of the latest versions of more than 80 products. These products include DB2, CICS Transaction Server, MQSeries, IMS, Net.Commerce as well as IBM compilers and application development tools, and system management and network management products.

Introduced in 1994, Parallel Sysplex capacity pricing is designed to make it more cost-effective for customers to deploy critical business applications in a Parallel Sysplex cluster. With Parallel Sysplex Level C Pricing, the cost to add capacity to a Parallel Sysplex cluster or stand-alone server with total capacity of more than 1,000 MIPS is more attractive than ever before. The more total MIPS the customer adds, the lower the incremental price for adding capacity.

S/390 Customers Move Toward Usage-based Pricing

The second enhanced pricing model is S/390 Usage Pricing. Historically, charges for middleware have been based on the total system capacity, which is measured in MIPS. When customers added MIPS to a system, all middleware prices would increase accordingly, even if usage of an individual middleware product remained constant.

Seeking to help customers better manage software costs, IBM is providing OS/390 Version 2 customers with S/390 Usage Pricing for the latest versions of DB2, CICS Transaction Server, IMS and MQSeries and four related products. Designed to make it more economical for customers to grow their S/390 platform as well as Parallel Sysplex cluster environments, S/390 Usage Pricing shifts the S/390 software pricing for IBM middleware from capacity-based pricing to usage-based pricing. Customers need only pay for the middleware they use, allowing them to add new applications without the worry of paying for middleware they don't use. Many of IBM's customers who use any of the eligible IBM middleware products can benefit from taking advantage of S/390 Usage Pricing.

S/390 Usage Pricing builds upon a similar usage-based pricing model first introduced by IBM in 1994, which will be replaced by the S/390 Usage Pricing model on current versions of IBM middleware. To help ease the administrative tasks of usage configuration setup, data analysis and report generation, IBM also intends to deliver enhanced tools to help simplify these tasks over the next 12 to 18 months. IBM also will make these tools available to independent software providers if they choose to use them.

S/390 New Application Growth Environment Pricing Option

Parallel Sysplex clustering technology is IBM's recommended strategy for customers to add workloads to their S/390 environment. However, for customers looking to deploy new applications in a distributed computing environment or on a dedicated S/390 server, IBM today announced the S/390 New Application Growth Environment.

Designed as a cost-competitive alternative to deploying critical applications on UNIX platforms, the New Application Growth Environment could provide customers with a reduction of up to 75 percent in their IBM software costs versus standard capacity-based pricing when running one or more specific applications on a dedicated S/390 server. These applications include Lotus Domino, SAP R/3, BaanERP, Oracle Applications, PeopleSoft, Intelligent Miner, Net.Commerce and consolidation of file and print server workloads from UNIX and Windows NT platforms. Customers can upgrade this processor and continue to receive S/390 New Application Growth Environment license options provided the processor remains dedicated to running one or more of the qualifying applications.

Pricing and Availability

Both the S/390 Usage and Parallel Sysplex Level C pricing offerings are slated to become effective January 1, 1999. The New Application Growth Environment Pricing option is effective immediately.

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Editor's Note: IBM news releases and fact sheets are available on the Internet, via the IBM Home Page at S/390 releases and fact sheets are available via the S/390 Home Page at

S/390, OS/390, Parallel Sysplex, DB2, CICS Transaction Server, IMS, Net.Commerce, Intelligent Miner and MQSeries are trademarks or registered trademarks of IBM Corporation. Lotus Domino is a trademark of Lotus Development Corporation.

UNIX is a registered trademark of the Open Group. Windows NT is a trademark of Microsoft Corporation. All others are trademarks or registered trademarks of their respective companies.