Commentary: Raptor slashes entry costs

By Mike Chuba and John Phelps, Gartner Analysts

IBM's z800 server family offers a lower point of entry into the IBM 64-bit zArchitecture mainframe world--with minimal feature and function differences from the z900.

With the z800, IBM has lowered the cost of entry into the zArchitecture from $750,000 to about $250,000, a $500,000 savings delivered primarily through lower performance levels.

	See news story: IBM unleashes new "Raptor" mainframe

However, no upgrade path into the z800 exists for 9672 or Multiprise 3000 customers. Those using the 9672 may want to migrate if the software savings justify the hardware shift. Multiprise 3000 customers whose primary focus is to reduce cost will likely be disappointed by the high price tag required to move to the zArchitecture (because of no incremental MIPS upgrade). For that reason, Multiprise 3000 customers could be ripe for poaching by non-mainframe hardware vendors. The z800 family does, however, offer growth for high-end Multiprise customers at a lower price than the z900.

In addition, IBM is reversing the course it set several years ago of trying to reduce the number of software pricing options on the mainframe. The z800 will provide customers with three options:

• Model-based pricing (similar in structure to the current Multiprise 3000 pricing).

• Aggregated pricing for systems in a Sysplex environment.

• Engine-level pricing for new workloads.

The latter pricing option represents a substantial discount (on the order of 80 percent) for the operating system, and reflects the bifurcated approach that IBM has taken with pricing to protect its legacy revenue streams while pursuing new workloads. This discounting is comparable to a program that IBM introduced three years ago, but may be more successful this time due to less-restrictive terms and more mainframe-ready applications.

Gartner believes that the z800 announcement will help create a second wave of zSeries demand among IBM's customers. The dedicated zSeries offering for Linux, which was announced in January, was the first move on this front.

Gartner believes that if Raptor is to devour competitive high-end Unix systems (as its name would suggest), IBM's Linux initiatives must provide the impetus. Consequently, applications and cost of ownership will be critical factors, and the onus is on IBM to make a compelling case.

(For a related commentary on IBM offering Linux on its zSeries mainframes, see gartner.com.)

Entire contents, Copyright © 2002 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.