Power 720: Same Entry Price, But More Room to Grow at Less Cost

September 27, 2010 Timothy Prickett Morgan

As is usually the case with an IBM Power Systems announcement, there is no one simple way to characterize the price/performance of the new entry Power7-based machines that made their debut in August and that started shipping on September 17. But I can tell you this much after an initial analysis of the entry Power 720 boxes that are the most likely choice of platform for IBM i shops: If you plan to grow, this box is a lot better than its predecessors.

This is true for two reasons. First, with anywhere from four to six cores in a single socket machine, there’s just a lot more oomph in the box, ranging from just under 6,000 units of performance on the Commercial Performance Workload (CPW) benchmark that IBM uses as a relative gauge of oomph on machines in the AS/400 lineage with a single 3 GHz core activated to 46,300 CPWs with eight cores turned on. The way the Express Edition of the Power 720 is sold, the base machine comes with four cores activated and i 6.1.1 and i 7.1 cost $2,245 per core (with five user licenses included on each core), plus another $250 per user above and beyond that.

And this is the second reason why the Power 720 is a better deal than the Power 520 and earlier machines in the System i lineup. On these earlier machines, the single-core Power 520 had the cheapo i 6.1 licenses like the Power 720 has, but on larger boxes with two or four cores, those IBM i licenses were crazy expensive at $14,995 per core. So for a fairly modest number of end users–say between 10 and 80–the Power 520 with two or four cores could be prohibitively expensive. But the Power 720 is going to look like a bargain for customers who need four cores of oomph and have a few dozen users.

Here’s a chart that shows how the past five generations of entry systems stack up on a per-user basis:

As you can see, on a per-user basis, the price of a single-core entry box with 40 users has not changed that dramatically since the System i 515 was introduced to blunt the attack of Microsoft’s Windows on the midrange. And for large numbers of users–I consider 150 concurrent users a pretty large number of seats for a two-core Power Systems machine–the cost per user has been trending down after that big drop with the System i 515 several years back.

I only pulled out two representative sets of comparisons to analyze the Power 720 and see how it compares to its predecessors. You can see a more full set of comparisons in this monster table I have built as a companion to the Power 750 comparisons I gave you a little more than a month ago.

On thing to keep in mind in comparing the Power 520 and Power 720 machines in this table. The Power 520 machines shown are based on the so-called iLoyalty discounted machines IBM announced in March 2009 to try to make the Power 520 more appealing to potential i 6.1 customers. Under these iLoyalty discounts, IBM gave the first IBM i processor entitlement away for free on the single-core Power 520, which was worth $2,245, plus it also cut the cost of activating 25 users on the machine to $1,875, lopping $4,120 off the cost of this machine and cutting the cost of the overall system by 17 percent. On a two-core Power 520 box loaded with stuff and aimed at 150 IBM i users, the free i 6.1 license on the first core plus half price on the user licenses cut the cost on the box by 40 percent. Here’s the important bit: my table has the iLoyalty pricing for the Power 520s because that was the prevailing price, and the Power 720s are holding pace or doing better (depending on the scenario). In effect, iLoyalty is the new pricing at the low-end of the product line as far as the IBM i side of the Power Systems house is concerned.

I still think it is insane to charge $14,995 per core for i 6.1.1 or i 7.1 on the six-core and eight-core variants of the Power 720, but most customers won’t care since the typical entry IBM i shop has one or two cores activated. Most shops will never even go near the six-core and eight-core Power 720s, so they will never pay that higher IBM i price. This is progress and something that IBM should be praised for. So don’t forget to say thank you.

Now, having said all that, I think it is a smart IBM that has all i 6.1.1 or i 7.1 licenses on Power 720 machines set at $2,245 per core. That is, in fact, pricing that is consistent with the entry server market. And if you are buying one of those six-core or eight-core Power 720s, with only a couple of the cores running IBM i and the rest running Linux or AIX workloads, then you should argue for the lower IBM i prices.

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