IBM Extends Dynamic Capacity Pricing Scheme To Its Cloud

February 24, 2021 Alex Woodie

What if you could buy computer processing credits from a systems vendor and use the credits to run workloads on your on-premise server or in the vendor’s cloud? Better yet, what if the vendor was IBM and the workloads were IBM i applications? Because that is essentially the hybrid computing pricing structure that IBM unveiled yesterday as part of its latest Power Systems announcements.

The new hybrid pricing option is an extension of the so-called Dynamic Capacity pricing scheme that IBM unveiled through its Power Private Cloud offering, which IBM launched in May 2020. As part of that offering, a customer runs a Power Systems machine on-prem in the traditional manner, but IBM charges for it as if were a cloud offering.

As workload demands increase, Power Private Cloud customers can buy more credits with IBM to open up more capacity on their Power Systems machine. What’s more, as workload demands go down, IBM automatically scales the capacity down too, helping the customer to save money. This approach gives users cloud-like control over their system usage and, perhaps more importantly, more control over costs–all without giving up physical control of the server (which is still a concern for some companies).

This week, IBM is announcing that it’s extending that Dynamic Capacity program to its actual cloud offering. As part of the deal announced yesterday, IBM is allowing customers to take credits that were set aside for the Power Private Cloud and essentially convert them to buy capacity on Power Virtual Server running in the IBM Cloud, which is the name of the company’s public cloud offering that supports IBM i, Linux, and AIX.

Giving customers the ability to run Power workloads in the manner that works best for them is a big win for customers, says Steve Sibley, vice president and global offering management for IBM.

“You buy a set of credits and you get a certain amount of minutes, essentially, to run processors, memory, or operating system,” Sibley says of the conversion that happens to enable the Dynamic Capacity funds to support Power Virtual Server environments. “Think of it as a single credit value that then is mapped to the value of what you’ll be running, to give you that flexibility.”

The two pricing mechanisms will not be an exact one-to-one match because of the different ways that IBM prices the two offerings, Sibley says. There are other factors in play in the cloud, including networking and storage, that aren’t taken into account with the Power Private Cloud offering, whereby IBM gives customers a discount on a Power 9 machine and then charges them for the capacity that they use.

But IBM has worked to match the two pricing structures as closely as possible to ensure that customers are getting equal value if they choose to run workloads in IBM Cloud data centers rather than on-prem Power servers. The exact pricing has not been made public yet, but they will be close, Sibley promises.

“We think we have pretty well-aligned pricing from that standpoint,” Sibley says. “We haven’t rolled out specific prices yet . . . . But we think we’ll have pretty good equitable pricing across them.”

IBM is still ramping up its Power Virtual Server business in the IBM Cloud, and it likely will give Power Private Cloud customers incentives to give the cloud a try.

“If anything, we’re going to encourage a little bit of [usage] into the cloud, just to encourage clients to try it, so we may have an actual promotion where you get extra discount in the cloud,” he says.

Sibley points out another piece of news that will benefit customers: They can spend the Dynamic Capacity units on Red Hat Linux and SuSE Linux environments in the cloud, right alongside their IBM i and AIX spending. Previously customers would have had to license those Linux environments separately in the cloud, but now IBM is including them with its new pricing scheme, which should help customers running mixed workloads.

Sibley says IBM is building momentum for its Power Virtual Server business in the cloud. He says the company has a good mix of IBM i, AIX, and Linux customers, and that IBM i shops are very well represented.

“We had one client who moved 300TB of data into the cloud,” Sibley tells IT Jungle. “We had them up and running in six months from scratch. It ties to the frictionless direction of being able to be on the same kind of architecture as they were running in their own data center, and yet being in a cloud-like experience. We’re starting to really get some great momentum on cloud.”

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