The More Things Change

September 20, 2010 Timothy Prickett Morgan

Do you sometimes think that the part of IBM‘s brain related to the AS/400 and its successor platforms has been put in stasis so it is still, in some way, in 1988? That perhaps the people who do marketing for the IBM i platform are not located in Somers, New York, but rather in Punxsutawney, Pennsylvania, where the Groundhog Day just keeps looping and looping, like in that fabulous 1993 film by the same name? Maybe it is just me, but despite all of the technology changes and name changes, the Power Systems-IBM i combo does not seem to have changed all that much in important respects from the AS/400s announced in 1988.

I don’t know what possessed me to do this, but I was bored last week and I went in search of the original AS/400 B Series and OS/400 announcements from June 21, 1988. And I realized that I have been living the same AS/400 announcements, with variations, over and over again for more than two decades. Just like Bill Murray in Groundhog Day. Either that or something has snuck into my homebrew that I didn’t put in there.

You can see the original AS/400 B10 and B20 system announcements in letter 188-088, the B30 through B60 system announcements in letter 188-089, and the OS/400 announcement in letter 288-287.

The first thing that jumped out at me, as soon as I browsed through these letters, is that the fundamental cost of OS/400, now called IBM i, has simply not changed all that much. The operating system has been ripped up off its microcode, extended and supported on different microcode, hypervisors, and processors and systems, but the fee that Big Blue is charging for the code is not substantially different. System prices have not changed all that much for like-for-like rack-based or tower-based form factors, although the underlying technology in new servers and their capacity has obviously changed a great deal. You get a lot more iron for the money today, but it takes a lot more iron to do modern computing. And I suspect it is a wash in favor of IBM when all is said and done.

The 9404 B10 and B20 machines were deskside tower machines aimed at entry customers. The B10 came with 4 MB of main memory and an optional 4 MB that could be added; it came with a 630 MB disk drive and you could boost it up to 945 MB. The B10 was the touchstone machine for the original AS/400 relative performance, set at 1.0, but on the new Commercial Performance Workload (CPW) test introduced in the mid-1990s and which replaced the RAMP-C online transaction processing test in 1996, after the PowerPC-based AS/400s were announced, the B10 was given a relative performance of 2.9. The B20 had about 30 percent more processing oomph on the RAMP-C test, but got a 5.1 CPW rating a decade after it was launched; the machine could have from 4 MB to 16 MB of memory and the same disk options. Both boxes had a single system I/O bus and four peripheral slots for networks and terminals. The B10 cost $19,000 for a bare bones box, and the B20 cost $33,500. IBM had preconfigured machines called Total System Packages, you will remember, that shaved a bit off the cost of the base box if customers bought preconfigured machines that IBM pumped through its reseller channel. The P10, as the TSP version of the B10 was called, cost $17,500 while the P20, the TSP version of the B20, cost $31,000. The OS/400 license for the B10 came to $5,500 and for the B20 it was $10,500. Those were processor-based on-time charges, and included the operating system and its integrated relational database management system.

Sounds a lot like the Power 720 and 740, right? And the TSP is what we now call an Express edition.

One big change, obviously, is the cost for a unit of processing power. On the B10, the base unit cost $6,552 per CPW, not including memory and disk, and $6,034 for the TSP configuration. No one really buys a non-Express version of any of the entry Power Systems servers. The smallest of the Power 720s, with four 3 GHz Power7 cores activated costs $6,835 with 8 GB of memory and two 73.4 GB disks, plus $2,245 for the base i 7.1 license for one user, another $2,500 for an additional 10 users, and $750 for software support (which used to be free). With one core running i 7.1, you’re talking about something on the order of 6,000 CPWs of oomph, or a little more than a buck per CPW for the base iron. Now, it takes a heck of a lot more CPWs to get the same invoice out these days, so nothing is free. But look at how that operating system price has not really changed all that much in all of these years for a relatively small number of users. $5,495 for 11 users in 2010 on a single core machine, and $5,500 on a single-core entry machine in 1988 for a theoretically unlimited but probably around a dozen or fewer users.

If you want to get a real gas, look at memory and disk prices. On the B10 and B20 machines, 4 MB of memory ran you $6,000, and a 315 MB disk drive cost $5,500. A 5.25-inch floppy diskette drive–which was all modern–ran $900 and a Token Ring network adapter cost $3,500.Today, on a Power 720, the networking is built in, but you need more disk drives and a RAID 5 disk controller and probably mirrored controllers to be safe. Disk drives have gotten cheaper as well as more capacious by 2010, ranging from $498 for a disk formatted to 69.7 GB for IBM i to $1,050 for a 283 GB disk. But if you want to be modern, like the B10 and B20 were in their time, then you’re shelling out $5,200 for a 69 GB 2.5-inch SAS solid state disk. Eight GB of memory costs a mere $1,065, but you probably need something on the order of 32 GB to have a useful machine, so you are spending $4,260. That’s a little bit better than the $6,000 IBM was asking for 4 MB back in 1988.

No matter what, I suspect that the minimum practical configuration of an AS/400 B10 was on the order of $25,000 to $30,000 in 1988, and it is also around the same price for a minimum practical configuration of a Power 720 when all the costs are loaded on over, say, a three-year term.

Plus ca change, plus c’est la meme chose.

The price of the OS/400 used to be more graduated than it is today. In 2010, we have a mix of the user-based pricing IBM announced initially in the early 1990s and then killed off, with the processor-based one-time charges we are all used to. Of course, now software support is not included in the license, as it was for the first decade of the platform. On B30 machines, OS/400 cost $14,000; on B40s, it cost $25,000; on B50s, it cost $38,000; and on B60s it cost $55,000. Those prices obviously included the 5250 green-screen protocol, although no one talked about it that way because that was just the way RPG programs talked back to the server.

On Power 750 machines, as I explained back in April, the operating system costs $40,000 per processor core, plus $50,000 per core for 5250 Enterprise Enablement; Software Maintenance (SWMA) cost an additional $4,000 per core per year. The 5250 tax, when compared to the original B50, is still alive and kicking. Ditto for the Power 770, where IBM i costs $53,000 per core plus $6,000 per year for SWMA and 5250 Enterprise Enablement costs $50,000 per core (or $150,000 to activate it on the entire machine).

The price of a reasonable configuration of hardware has stayed more or less the same and the cost of the software has risen for those who still use the 5250 protocol and is about the same for those who have moved on to other protocols.

I don’t think these prices are good or bad or otherwise. I am merely making an observation. I am curious how other software stacks have changed over time, and I have this sneaking suspicion that once a platform gets established in the data center, its pricing gets more or less put into stasis. That’s the only way that companies can afford to create systems, possibly, by having both a reasonably predictable system revenue stream and predictable costs for augmenting the system.

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