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New IBM Power systems offer pay-as-you-go pricing

IBM rolled out a low-end Power system with pay-as-you-go pricing to make it easier for users to deploy hybrid clouds for mission-critical applications.

Hoping to tie its Power systems more tightly to the cloud, IBM rolled out new entry-level hardware along with consumption payment models, giving users more options for deploying hybrid clouds for mission-critical applications.

The company also introduced its first pay-as-you-go pricing model to allow users to pay by the minute for capacity used above the aggregated pool of systems to reduce Capex costs.

In tandem with the pay-as-you-go model, IBM debuted its Cloud Management Console to give users a more granular view of both real-time and historical consumption of resources across multiple IBM environments, including the Power (AIX), IBM iSeries and Linux environments.

One analyst said some aspects of the pay-as-you go model, coupled with the new low-end Power system, gives IBM another opportunity to attract new users to the company's hardware and cloud platforms. He added that is about time the company came up with such a plan.

"It's a pretty interesting offering," said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy. "They are the last major company to announce something like this, so they had to come up with something that was compelling."

Another analyst said the new pay-as-you go model, coupled with the new low-end Power system, could set IBM apart from the offerings of hardware archrivals Dell and HPE, and potentially draw the attention of cost-conscious IT buyers.

"If you have systems in the pool that are overutilized where they go beyond the [capacity] terms of a license, their cost is balanced out by those systems that were underutilized," said Frank Dzubeck, president of Communications Network Architects Inc. "IBM is trying to create a competitive discontinuity around the cost of entry for IT operations."

They are the last major company to announce something like this, so they had to come up with something that was compelling.
Patrick MoorheadPresident and principal analyst, Moor Insights & Strategy

The new low-end Power system, which can be integrated into the shared pool of servers in the pay-as-you go offering, can have as little as one processor core and just 256 GB of memory with versions available on IBM's E980, E950, S922 and S924 Power systems.

IBM will couple the new systems together with Red Hat's OpenShift, IBM Cloud Paks and Ansible Automation, the combination of which, company officials say, will hasten the implementation of users' digital transformation projects.

For instance, users gain greater flexibility in colocating existing AIX/IBM iSeries applications along with new cloud-native applications with 3.2 times more containers per core, as well as significantly faster performance compared to previous IBM platforms, according to the company.

"IBM had to make a move like this if they want Power [systems] to operate well with the cloud," said Peter Rutten, research director within IDC's enterprise infrastructure practice. "What's interesting is they are tackling this on three cloud fronts: private, hybrid and public."

Rutten added that working with Red Hat's OpenShift and containers to go across IBM Power, IBM iSeries and Linux gives users more flexibility in deploying cloud applications.

The addition of Red Hat Ansible on Power Systems affords users the opportunity to standardize their approach to IT automation using a platform that works across the Power, Z Series mainframes and x86-based environments, said Dylan Boday, director of offering management for IBM's offering management -- systems, hybrid cloud and AI solutions.

With more consistent automation skills and processes across an enterprise, businesses can save on training costs and also free up time for IT pros to pursue new development projects, he said.

IBM also expanded global access and workloads running in the IBM Cloud. SAP HANA is also certified for IBM's latest hardware.

One analyst was encouraged by the coordination IBM and Red Hat displayed in combining new and existing offerings from each company, which in this case should serve to benefit both parties competitively.

"For the most part, Red Hat and IBM are operating independently and there's nothing wrong with that," said Daniel Bowers, a research director at Gartner. "Red Hat is a rock star with OpenShift and Ansible and if IBM can jump on their coattails with the right products of its own, each company is going to benefit."

IBM officials believe the timing of the new cloud enhancements with lower-cost hardware may prove fortuitous, particularly in the middle of the COVID-19 pandemic. Steve Sibley, vice president of offering management for IBM's Power systems unit, said increasingly corporate users are rethinking how to be more resilient in the face of the disruptions brought to their IT operations.

"It's these sorts of [hybrid cloud] enhancements that can better assure users they have the flexibility to find the right compute platform for data-intensive applications," Sibley said.

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