clist81.html

Cheryl's List #81 -
September 19, 2003

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1. Updated zSeries CPU Chart

We've just completed a new September 2003 zSeries CPU Chart and have emailed it to electronic subscribers today. It includes the new software pricing MSUs (described in the next item) and an update to the architectural level set for the z-machines. We strongly suggest (and hope) that independent software vendors (ISVs) will start using the "pricing" MSUs instead of the "capacity" MSUs for pricing. If you are a print subscriber and need the new chart immediately, please email a request to Linda May (admin at watsonwalker.com). (This chart may be purchased by non-subscribers at http://www.watsonwalker.com.)

2. IBM Software Pricing

In our Cheryl's List #79 on July 3, we were pleased to describe a new IBM z/OS migration offering that provided incentives to move from a non-zSeries machine to a z900 or z990 machine. Our example showed a reduction in cost from $900,000 to $185,000 for a move to a new (and supported) machine with additional capacity. This was officially announced on July 8 (#303-130). This offering was supposed to be available until the end of this year, but was withdrawn on August 26 in announcement #303-151. Our readers wanted to know the reason for this sudden change.

IBM chose to withdraw the z/Architecture Migration Offering and replace it with a set of permanent pricing initiatives, all grouped under the heading of "Mainframe Charter." IBM feels that this set of permanent pricing initiatives will provide equivalent savings to the migration offering and will be available to more installations. There was no announcement letter for the Mainframe Charter, but it is documented at IBM's Web site at http://www.ibm.com/zseries/announce/charter. The August 22 announcements had three major components:

a. The "Mainframe Charter"

This charter is a position statement from IBM describing their continued support of the mainframe. You can read more about the mainframe charter on the Web site above. A very good FAQ file on the charter and the pricing changes is located at http://www.ibm.com/zseries/faq/pdf/mainframe_charter_faq.pdf.

b. New Pricing Initiatives

IBM is providing several software and hardware pricing reductions (prices given are US prices):

zSeries memory prices are reduced to $10,000 per GB. Effective 8/22/03.
There will be consistent IFL (Integrated Facility for Linux) pricing at $125,000 per IFL engine. (Essentially you get double the capacity of a 9672 IFL engine for the same price.) Effective 8/22/03.
z/OS pricing is lowered for sites under 315 MSUs. This is the pricing initiative that replaced the pricing promotion announcement #303-130. Effective 10/1/03.
EWLC (Entry Workload License Charge) is available for z800 machines - this provides WLC (including sub-capacity pricing) for stand-alone z800s running either z/OS or z/OS.e and can provide a reduction in price from current zELC pricing. See announcement #203-233 for more information. Effective 9/9/03.
NALC (New Application License Charge) prices are reduced up to 80% for G5, G6, z900 and z990 servers. (These are similar to z/OS.e prices on a z800.) Effective 10/1/03.
Sub-capacity pricing will be made available for certain WebSphere family products for z/OS on z900 and z990. This sub-capacity pricing was made available on the z800 in April of 2003. Available year-end 2003.
Base memory for z990 servers is increased from 8 GB to 16 GB with no increase in price. Effective 9/8/03.
MSU pricing for z990 servers is reduced by approximately ten percent due to the introduction of 'pricing' MSUs to replace the previously announced 'capacity' MSUs through the addition of microcode. This is one of the reasons for our updated CPU Chart above. Effective 10/1/03.
On/Off Capacity on Demand support will be added for IFL engines. Effective 10/31/03.
On/Off Capacity on Demand daily charges are made available to selected IPLA (International Program License Agreement) z/OS products. Effective 9/15/03.

c. A Rebate Promotion

With the purchase of a z990 processor, a customer can earn a rebate credit of up to $250,000 ($200,000 for transactions delivered through IBM Business Partners). The rebate credit will be paid against the subsequent purchase of eligible IBM products. This promotion is described in IBM announcement #303-165 (September 9), and is available from September 9th to December 31st. Some of the products mentioned in the announcement are:

WebSphere: Portal, Business Integration, Application Server, Studio Application Developer and Commerce for Linux
DB2: Connect, UDB for Linux
IMS Connect V2
z/VM
ESS 800 (Shark), including PPRC or XRC features
CBU contracts, including z990 On/Off Capacity on Demand
Enterprise Library & VTS
IGS Services - several

3. Software Pricing Observations

During my "Hot Flashes" presentation at SHARE, I found out that at least half the audience - over 100 people - was running z/OS on zSeries machines, and thus eligible for WLC pricing. Only a handful of those sites had looked into or were using WLC (Workload License Charge) pricing. I think this is a shame! You can make significant reductions in cost by investigating WLC, and especially sub-capacity WLC. Yes, it takes a LOT of time to evaluate the pricing with and without WLC, but it is almost always worth it. The job of evaluation has gotten even harder due to the new pricing initiatives described above, but a proper evaluation can save hundreds of thousands of dollars. (It can certainly save enough to justify your next trip to a class, CMG or SHARE!)

Although WLC refers specifically to IBM, don't forget to check (and even push) your other software vendors to see if they provide similar pricing. Be certain to check on sub-capacity pricing.

4. Technical Staff & Software Evaluations

Another thing I discovered at SHARE is that there are several analysts (such as Gartner Group) who are reportedly recommending that installations should not invite technical staff to participate in software evaluations. I haven't checked with Gartner, but several installations have confirmed it in conversations with me. I am amazed and chagrined at this attitude. I would never attempt to make a decision on software without the input (and concurrence) of my technical staff. That staff can provide input on support issues, software levels required to support the application, anticipated capacity requirements, maintenance issues with the vendors and a variety of other aspects.

The initial cost is only one of the considerations when evaluating a software product. What will happen if you can't get the level of support you need? How many unhappy customers will you have if the product fails without that support? How much will it hold you back if the vendor doesn't provide support for the new hardware or software that you have planned? How much will it cost if you can't implement new facilities? What will happen if the vendor underestimates the required resources for the application? Who will see the pain?

Without technical support to evaluate the products from this light, you could be stuck with a totally unusable product. Please pass this note along to your management. I'll be happy to discuss this with anyone.

5. APAR Correction

Thanks to Lee Roberts for catching a typo in my SHARE "Hot Flashes #10" that was posted on our Web site (http://www.watsonwalker.com/presentations.html). On page 6, I stated: "OA02909 (OS/390 R10-z/OS 1.4, 6/19/03) - WLM Classification Of OMVS Work With UI Attribute Incorrect. WLM classification of OMVS work with the userid (UI) attribute no longer works after APAR OA54709 is applied." The offending APAR is actually OW54709.

Stay tuned!

Cheryl Watson
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