IBM i Dominates the CPW Capacity Budget

October 11, 2010 Timothy Prickett Morgan

IBM has a tiered approach to processing capacity for Power Systems hardware using Power7 chips, with smaller machines costing a lot less per unit of capacity than midrange boxes, and enterprise capacity costing even more. As I showed in last week’s issue, the difference in a unit of processing capacity is quite large across all the Power7 machines. When you add in the costs of IBM i 7.1 and Software Maintenance support for the complete system, the numbers get a lot bigger and it becomes obvious why customers don’t really want to buy anything other than a Power 720 if they can help it.

It is also quite obvious that Big Blue does not really expect many customers to have eight, 16, 32, or 64 cores on any Power System machine running i 7.1, since the price disparity between entry machines and bigger boxes is so dramatic. And I also suspect, based on the price disparity for raw computing power (as expressed in the costs of raw processor feature cards and processor activations for those cores) and i 7.1 licenses and software support for the whole shebang that customers with large IBM i systems are getting, some pretty steep discounts to make it all palatable.

In last week’s issue, I took the entire Power Systems lineup based on the Power7 processors where IBM had released Commercial Processing Workload (CPW) relative performance benchmark test results for a given configuration. I then figured out the list price for the processor feature cards and processor core activations for each card, and calculated the cost per CPW for each setup and the CPWs per core after taking into account SMP overhead in each configuration based on IBM’s performance tests. (IBM’s CPW ratings for machines with multiple processor cards take SMP overhead into account, which is helpful. But when you are doing you capacity planning, you need to realize that as you make a larger and larger machine, the effective CPW per core goes down. If you partition the machine with logical machines using the PowerVM hypervisor, you can get a lot of that raw CPW that you lost to SMP overhead back, but then you pay a hypervisor performance tax–and one that IBM has never been particularly clear about.)

What was obvious from last week’s issue is that in terms of pricing, the Power 720 entry server is really designed to give IBM i customers the best deal they can expect, and one that is consistent with other low-end, user-priced System i configurations from early last year with the iLoyalty discounts. In many comparisons this week, I added the i 7.1 to all the cores shown in each configuration, but it is pretty obvious that most customers won’t do this. IBM’s intent with the multicore Power System machines has always been to have somewhere from one to four cores available for i5/OS or IBM i and then have other cores available to run AIX and Linux workloads. With the Power7 chips having four times the cores in a given server footprint, most customers will be able to get by with a PS700 (four-core) or PS701 blade server or a Power 720 entry box. Only some will require moving up to a larger system, such as the Power 750.

When you add in the software and support costs, which go up radically on the PS701 and PS702 blade servers and on the Power 730 and 740 midrange servers, it is obvious how customers will try to shoehorn themselves into PS700 blades or Power 720 rack/tower machines. The i 7.1 costs are much higher, and so are SWMA costs on these more capacious computing elements.

After building last week’s processor comparison chart, I figured I better go one step further and add i 7.1 and SWMA costs to each processor feature card to help you see how the costs stack up. It is important to note that this is not a full system cost, in that I am not adding in the cost of the chassis, memory, disks, and other peripherals. This data, which is shown on this week’s TPM monster bang for the buck comparison table (patent still pending), is just for processor feature cards, processor activations, i 7.1 licenses (including required users as specified in base configurations for user-priced machines), and one year of SWMA.

Here’s the data graphically for average cost per CPW for these hardware-software combinations by Power Systems model:

As in last week’s issue, I have shown the three most likely machines that i5/OS and IBM i shops will consider in green bars, with the other machines shown in blue. I think that the Power 750, when you add in the software costs, is very pricey indeed thanks to IBM’s software licensing charges on that box. The cost per unit of capacity is actually as high as on a top-end Power 795. Which seems crazy to me, but I don’t set the prices. For base processing capacity (again, just for CPUs and features), the Power 750 is considerably cheaper. But the cost of IBM i licenses is so much larger than what Big Blue is charging for hardware that the hardware price almost doesn’t make a difference. (And hence IBM has been compelled to allow customers to move over the non-base i5/OS and IBM i licenses on 750-class and larger machines. Customers balk at having to buy all those licenses again.)

Here’s what it looks like if we just drill down into the features for PS700, Power 720, and Power 750 machines:

When you look at this chart, can you tell which machine Big Blue wants you to buy? It is pretty obvious, isn’t it? One machine is nearly a factor of 20 less expensive than the Power 750 configurations. And if you need more oomph, the larger Power 720s with six-core and eight-core processors are considerably more expensive than the entry four-core Power 720s.

The reason is the IBM i pricing and support. On the PS700 blade, when you undo all the weird packaging that IBM does, the effective price of the base i 7.1 license is $745 per core, plus $1,250 for five user licenses per core and $1,000 for one year of SWMA per core. But you also have to buy another 10 user licenses per core, according to IBM’s Website, so that’s another $2,500 per core. On the Power 720, the pricing is exactly the same, but the 10 users are not required. IBM says the i 7.1 license costs $2,245, but that license includes five users, which cost $250 a piece, and 90 days of support, which is worth $250.

I undid all this bundling and made everything an annual license to make it less confusing and consistent with other machines in the Power Systems lineup. Pricing is the same on the Power 710 as it is on the Power 720, with four-core versions having the same low prices. But the six-core and eight-core processor features on the Power 710 and 720 servers and the PS701 and PS702 blades versions have a much higher effective cost of $3,495 for the i 7.1 license, plus $7,500 for 30 users and $4,000 for support. (These are all per core.) The PS701 and PS702 blades have an implied 30 users per core, but you have to buy another 10 users according to IBM’s Website. On the Power 730, 740, and 750, i 7.1 costs a flat $40,000 per core with unlimited users, plus $4,000 per core per year for SWMA, while on Power 770, 780, and 795 machines i 7.1 costs $53,000 per core (no user fees required) plus $6,000 per core per year for SWMA.

The interesting bit is that while Power 730 and 740 processors are cheaper than Power 750 hardware, once you fully burden them with software and support, the differences go away. (If you are sliding over lots of licenses as part of an upgrade, bully for you. You win!)

The bulk of the cost of raw computing power for i 7.1 platforms, as you can see from this chart below, is for the key systems IBM i shops will gravitate toward, dominated by software costs. Take a look:

Small wonder, then, that IBM is allowing costumers with 550-class boxes and larger to move their licenses over. Look at all that height on the red lines showing the share of the total processor capacity cost that is devoted to software. This, of course, is due mostly to the fact that OS/400, i5/OS, and IBM i have an integrated relational database management system. IBM is now charging $9,000 per core for the Application Server 7.1 variant of the operating system, which does not have a license for the DB2 for i database, against a total charge of $53,000 per core for the license for the operating system with it included. That’s $44,000 per core for DB2 for i, or 83 percent of the total software cost.

By comparison, Oracle charges $47,500 per core for its 11g Enterprise Edition database plus $10,450 per core for support at list price. Microsoft charges $27,495 per processor socket regardless of the number of cores in the Xeon or Itanium processor for its SQL Server 2008 R2 Enterprise Edition database, plus $6,874 per year for Software Assurance tech support. SQL Server Datacenter Edition, which is a special highly scalable version of the database aimed at data warehousing, costs twice that per socket.

Now I can get to work on Unix and Windows comparisons for the entry Power7 machines. I want to see how they stack up competitively as much as you do.

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