Concerns surface over Regatta gotchas

By Sarah Kimmel
Monday, January 27, 2003

      Once the initial “Wow” reaction wore off, customers started finding gotchas in IBM’s new iSeries models and associated offerings.

      "There are parts of this announcement where IBM is putting the customer between a rock and a hard place and the customer is going to have to pay,” says an Insider source.

      Many customers are skeptical of the new offerings, starting with the way 5250 CPW is now packaged. Although IBM promises big savings, shops are in an all-or-nothing situation in which they must purchase a box with either zero 5250 CPW, or the maximum amount of 5250 CPW.

      “IBM says that there will be discounted pricing for some models with maximum 5250 CPW. The smaller user might be hurt to because this package may cost a lot more than what they are paying now,” says Frank Bissig, development services manager, Brasscraft Manufacturing Co., Novi, MI.

      It is expected that shops currently running the high-end servers with a lot of 5250 Interactive within each model line will see savings in the new hardware and the Enterprise Package that includes maximum 5250 CPW.

      However, customers that currently require only a small amount of 5250 CPW may be forced into the package that has maximum capacity, and maximum price. Meanwhile, the price jump from the Standard Package to the Enterprise Package is significant. For example, a stripped-down i870 with the Standard Package costs $400,000, but with the Enterprise Package, this box jumps to $1.33 million. When it comes to comes to spending money, many iSeries customers feel that less is more.

      “Some customers are going to feel like they got screwed with Interactive because they don’t need the maximum and don’t have a choice. I want to see the pricing and see what 40-80% cheaper actually looks like,” says Mike Crump, project manager, Saint Gobain Containers, Muncie, IN.

Getting what you already paid for

      The Enterprise Package includes the e-business Solution Tools and the DataCenter Management Tools, which include licenses for software previously sold a la carte, such as WebSphere Application Server, Lotus Sametime and QuickPlace, BRMS, and Tivoli Storage Manager (IW 1/13/02). If you already own these, you may be paying for them again.

      “We already own licenses for those Domino products, WebSphere, and BRMS. I want to get credit. I don’t want to pay for it again,” says Crump.

Software Maintenance plan raises eyebrows

      As IBM has announced, iSeries shops will no longer be able to purchase Software Subscription or Support Line. Instead, the two will be combined into Software Maintenance.

      However, Big Blue is combining more than just features. IBM has said that the price of Software Maintenance will be equivalent to the price of Software Subscription and Support Line combined. For shops that don’t currently have Support Line, this increase in cost is not an option.

      “We don’t have a Support Line contract and it looks like we are going to be paying more to get the Software Maintenance. That concerns me,” says Dennis Rains, technical services analyst, Maytag, Newton, IA.

      Customers that do have Support Line have other concerns. When Software Subscription and Support Line are combined, they will follow one set of guidelines and won’t include one significant Support Line discount.

      “Customers used to get a 90% Support Line discount on a second system, but now that there is no more Support Line, shops will be paying full price for each model,” says an Insider source.

      IBM’s new Software Maintenance plan goes into effect on January 28. The Configurator and pricing was not available as of press time. It is slated to be available on Friday, January 24.

      IBM refused to comment on this story.

      The 400 Group is conducting its annual iSeries 400 Market Survey to help identify the pressing issues facing you. To complete the survey, see www.the400group.com/aiw/2003survey.

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