Earlier today, IBM executives stepped up to microphones in San Francisco and Boston to announce a big change in how IBM packages and prices its System i, the heir to the venerable AS/400. The company unveiled System i Express, new models whose prices are based entirely on the number of users they support instead of IBM’s arcane system of “interactive” and “batch” performance ratings. More importantly, the per user prices for these models make them potent competitors to Microsoft Windows servers. In addition, IBM made other announcements that significantly reduce the price of running enterprise applications on the System i.

I am not going to dive into the details of the System i Express announcement here, as I have already done so in an article about the new models in MC eServer Insight. (I would encourage you to read that article, which should be posted by now.) However, I am going to discuss the implications of IBM’s latest announcements for JD Edwards customers. And trust me…the implications are significant. Here are the key points you need to understand.

  • Most JD Edwards customers will pay significantly less for a System i than in the past. The new System i Express models — the 515 and 525 — offer the new per user pricing. When fully configured, the Model 525 will support well over 100 World or EnterpriseOne users at a cost of $250 per user. In virtually all cases, the Model 525 will cost significantly less than a similarly configured Model 520 Enterprise or Standard Edition. Indeed, the Model 525 could often cost less than the value-priced Model 520 Solution Editions for JD Edwards World and EnterpriseOne.
      
  • Disk prices are being slashed for all System i models. If you already own a System i and need to expand it, your disk costs just shrank. You can now buy 70GB drives for i5/OS workloads for $999. That’s 50% less than the $1,999 you had to slap down yesterday. IBM has also reduced prices for its 140GB drives by 40% to $1,799. As a result, the cost of running World and EnterpriseOne workloads on any System i — not just the new models — just became cheaper.
      
  • Running your EnterpriseOne application server on the System i could now be a more attractive proposition. Many EnterpriseOne users have decided against running their application servers on the System i because it costs less to do so on Windows systems. Today, IBM partially addressed that issue by announcing a new “application server entitlement” offering. Under the offering, owners of System i Models 550, 570, and 595 can run their application servers on one or more processors and pay only $14,000 to $19,000 per processor. That compares to the $41,000 to $59,000 per processor they had to pay before. To get the reduced price, customers must run their application servers in an i5/OS logical partition that is not running DB2 workloads.

Taken together, IBM’s latest announcements send a clear message that the company is positioning the System i to win workloads away from Windows servers. You can bet that EnterpriseOne workloads running on Windows servers are in Big Blue’s gun sights. At the same time, World users will enjoy lower prices for their server platform of choice. That makes today’s announcement a positive development for all JD Edwards customers.