Bang for the Buck: User-Capped i5 520s Versus Windows X64 Servers

November 6, 2006 Timothy Prickett Morgan

Nearly a month ago, IBM made a big deal about its new i5 520 Solution Edition for SAP applications, which offered dramatically better bang for the buck than regular i5 520s, and quietly announced what I am calling the user-capped i5 520 Solution Editions. Big Blue emphasized the wrong products in its announcements and public relations campaign. While an SAP box is interesting for a small number of customers, the entry user-capped i5 520 box does something more interesting: it actually competes head-to-head, and user-for-user, with Windows-based X64 servers.

No kidding. Well, at least not on the initial 20-user configuration. On the 40-user configuration, IBM got out of lockstep, as I will show in this story. But even still, the 40-user machine is still a lot less costly than a regular i5 520 Standard Edition machine.

Like many of us, I have been telling IBM for years to give a new pricing model a chance, to trust in volume economics and to realize that the only way to keep existing customers and to get new ones is to compete with the competition. (That is why they are called the competition, after all.) And when I built the detailed sheet comparing the user-capped i5 520 Solution Edition box for our coverage of the October i5 announcements, I had a hunch that the user-based pricing IBM chose might close the price/performance gap with Windows boxes. Windows is by far the dominant platform in the SMB space, and if you can’t compete with Windows, then you might as well just give up now.

The good news is this: The i5 520 Solution Edition with a 20-user cap absolutely competes in terms of performance and price with a Wintel box equipped with enterprise-class operating system, database, and virtualization software. (There are some caveats to this, of course, which I will explain in detail.) The bad news is that moving up to 40 users on the i5 520 Solution Edition is an expensive upgrade, and that to add performance and then database and operating system access on extra processor cores is very expensive compared to Wintel iron and software. IBM can, of course, fix this, and one might even argue that someone, somewhere within the deep recesses of IBM, should have built a sheet very much like the one I did to explain that the pricing would not work on the 40-user box as it did on the 20-user box.

To make a fair comparison, you have to look at three different configurations: the 20-user configuration; the 40-user configuration with only one core activated; and the 40-user configuration with the second core activated. In the case of the Wintel iron, I have picked the dual-core “Woodcrest” Xeon processors that provide similar online transaction processing performance to a single Power5+ core. There are faster Woodcrest processors, and this additional processing capacity is very inexpensive–unlike Power5+ processing on the i5 and p5 machines from IBM. Moreover, on the i5 520, IBM is not selling faster 2.2 GHz processors, but is holding to its 1.9 GHz chips. So that’s all you get.

I must tell you, I was immensely relieved when I built the table comparing a 20-user i5 520 Solution Edition with the user caps. Because Windows Server 2003 Enterprise Edition comes with a base 25 users, this is not a perfectly apples-to-apples comparison, but it is close enough. I was, however, disappointed at the incremental cost IBM is placing on the move from 20 to 40 users on the user-capped i5 520 Solution Edition box.

Take a look at the first comparison table, which stacks up the 20-user i5 520 against a Hewlett-Packard ProLiant DL380 with Windows.

The i5 520 Solution Edition Entry user-capped box has a single 1.9 GHz Power5+ processor, which is rated at 3,800 CPWs and which can handle about 37,800 transactions by my estimates. This machine is configured with 2 GB of main memory, a feature 5727 RAID 5 disk controller, and four 35.2 GB 15K RPM disks (which works out to just under 142 GB of total disk capacity). This is, as we all know, more than enough machine to support 20 users that hammer on Web-based OLTP applications. Including the first year of Software Maintenance, this box sells for $13,900, and with a 12 percent discount (which is historically a good entry negotiating point on a new IBM midrange server), this comes out to $12,232. i5/OS V5R4, DB2/400, and the Virtualization Engine hypervisor are all included in this price. When you do the math that works out to $3.22 per CPW and $612 per user. (As I explained last week, this is a 67 percent price cut over an identically configured i5 520 box running i5/OS Standard Edition. However, that box can handle many more users, since it does not have a user cap on it; my guess is somewhere around 170 users would max out the box.)

Now, look at the ProLiant DL380 G5 Windows box. This is a two-socket server, and I put the Xeon 5120 in it, which runs at 1.86 GHz–nearly the same clock speed as the Power5+ chip. It takes two Woodcrest cores to do about the same work as a single Power5+ core, based on my estimates and benchmarks on the Woodcrest chips that have been recently published. My guess is that a ProLiant DL380 with a single Woodcrest chip can handle around 40,810 transactions per minute, and if you work backward, that is about 4,100 CPWs. (I put six 36 GB 10K RPM small form factor SCSI disks on the ProLiant box, giving it about the same amount of disk performance as the four 15K RPM disks in the i5.) The ProLiant hardware, as you can see from the table, is much less expensive, at $5,862. And that list price is street price in single unit quantities.

But Windows Server 2003 Enterprise Edition R2 is not cheap, at $3,999 on this box. And SQL Server 2005 Standard Edition costs $5,999 for a per-socket license, too. And when you add in VMware‘s ESX Server 3 hypervisor, that puts another $5,750 onto the price. (That box includes an HP warranty with 24×7 onsite repair and tech support for Windows, SQL Server, and ESX Server.) And that works out to $15,860, or $3.87 per CPW and $634 per user.

Yes, that is considerably more expensive than the i5 520 Solution Edition. And, if you wanted to be fair and work the Windows box back down to 20 users–which Microsoft won’t let you do since 25 users is the base number for Windows Server 2003 Enterprise Edition–then the per user charges for this Windows box would be more like $783 per user. (You would take of $199 for five Client Access Licenses for Windows.) That makes the Windows box 28 percent more expensive on a per-user basis and 20 percent more expensive on a per-CPW basis.

All I can say at this point is this: About freaking time, IBM.

Here’s the thing, though. If you want to upgrade to the user-capped i5 520 Solution Edition Growth with 40 users, this jump is not cheap. Just being able to have 40 users access the same iron with 2 GB more of main memory thrown in (and the same CPW rating) jumps the i5 price up to $25,900, and that will be about $22,792 on the street. While this is about half the cost of an i5 520 Standard Edition with the same hardware, upgrading a ProLiant and a Windows stack is not as expensive as the user-capped i5 520s.

Take a look at the second table. There are two different sets of configurations in this table. The first shows the Solution Edition Growth with more users and memory, but the same hardware, and a mimic of the i5 520 Standard Edition and the ProLiant. These first three just add users and match the 4 GB of main memory. The second set of configurations activates the second core in the i5s and adds i5/OS and DB2/400 to that core, and on the Windows box, it adds a second Woodcrest processor to the empty second socket in the box and adds Windows and SQL Server to it.

On a cost per CPW basis, the 40-user i5 520 Solution Edition works out to $6 per CPW, which is 46 percent more expensive than the Windows box. The reason is simple. IBM doubled its price, more or less, while on the ProLiant, it costs only $598 to add 2 GB of memory and only $995 to add 15 more Windows users to the system to get up to 40 users. The incremental upgrade on the Windows box is a mere $1,593.

Now, let’s activate twice as much processing capacity so we can actually support those extra users. On the i5 520 user-capped box with 40 users, it will take an additional $1,800 to turn on the second core and then $21,000 to turn on i5/OS and DB2/400 for that core. Assuming no discount for that processing capacity (but a discount of 12 percent on the hardware and initial software in the box), that works out to a street price of $45,376, or $6.39 per CPW. So the incremental capacity did not change the cost per capacity all that much. However, the cost per user is a lot higher, since each user is being given twice as much CPWs now (and roughly the same amount as the 20 users on the Entry configuration). That works out to $1,134 per user.

The license to Windows Server 2003 Enterprise Edition covers the whole box, regardless of the number of cores, so there is no incremental cost here. SQL Server costs double because I chose the per-socket pricing method Microsoft offers for SQL Server 2005. VMware’s ESX Server is priced in two-socket increments, so this cost also remains flat and is therefore spread over twice as many users. So the per CPW cost of the similarly configured Windows machine comes to $3.36 per CPW, and the per user cost comes in at $593 per user.

The problem with the user-capped Growth configuration, when you get right down to it, is the cost of activating i5/OS and DB2/400 on that second core. If IBM tossed in that second core activation for free, then the pricing of the i5 520 Solution Edition would drop to $3.43 per CPW and $609 per user. It would be virtually the same as the Windows configuration.

So, you know what you need to do: Tell IBM to make that a free software upgrade, or no deal.

And while you are at it, remind IBM, if you have homegrown RPG and COBOL applications, that you want similar kind of pricing. Why on earth should only customers buying software from 22 software vendors get such good pricing? Why isn’t user-capped pricing available as an option from the i5 520 all the way up to the i5 595? And, while I am thinking about it, why isn’t 5250 processing capacity made available as a software feature for a reasonable price on such machines. I don’t know what 5250 capacity is worth, but perhaps a few thousand dollars per core is fair. Whatever you think, let IBM know. And while you are at it, let me know, too. We can all bug IBM to continue down this correct path to get i5 pricing competitive.

One last thing–what about 60, 80, 100, 200, and 300 users? What about the rest of the i5 line? Time is a-wasting, IBM.

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