During a time when interest rates are beginning to rise and IT budgets remain flat or are shrinking, IBM Global Financing (IGF) has announced an offering targeted to Regatta System i lessees to encourage them to upgrade to POWER 5. At the same time, IBM Systems and Technology Group (STG) is simplifying the terms and conditions for its System i Capacity BackUp (CBU) Editions. The CBU offering, which was partially announced in July and briefly covered in my article "Good Things Come in Threes," is aimed at enabling customers whose businesses are beginning to require 24x7 operations to grow a disaster recovery box into a high availability (HA) box without restrictive licensing and prohibitive cost. Moreover, IBM has also announced it is retiring certain System i products.

An Offer Too Good to Be Refused

It may be a little-known fact that IGF has a significantly large portion of the System i install base on lease. To this end, IGF is making an attractive offer to lessees of the Regatta 9402/4/6 Models 810, 825, 870, and 890 System i servers. The offering is called "Get More, Pay Less," and those customers who have a current lease on the aforementioned System i models can now upgrade to the POWER 5 9406 520, 550, 570, and 595 models at rates as low as 2.99% in the U.S. and 2.40% in Canada during 3Q06 only. In 4Q06, these rates will increase about 50 base points to 3.49% and 2.90%, respectively.

For reader edification, customers (lessees) must have, for example, a current lease on a System i810 and then upgrade to a System i520. These customers can remain on the older release of i5/OS and, under their current Software Maintenance Agreement (SMA), they can transfer that license to the new System i model. Another added advantage is that customers may keep the same serial number. Similar to refinancing one's home mortgage, existing IGF customers can take advantage of the offering for the terms discussed above in a lease extending 24 to 60 months. The caveat is that all upgrades must be installed by December 31, 2006. This essentially enables customers to extend their existing IGF lease while upgrading to more-current System i technology with the potential to lower their current monthly payment.

System i customers that do not qualify for the aforementioned program can take advantage of IGF's Low Rate Financing program with rates currently as low as 5.20% in the United States on both new models and upgrades.

Given that the Prime Rate, as last reported, is 8.25%, IGF's financing programs offer customers, especially SMBs, an opportunity to upgrade or purchase new equipment at not only competitive, but aggressive, rates. Moreover, some IGF programs will enable customers to roll not only hardware, but software and services into their financing agreement, which eliminates some of the complexity of managing multiple agreements.

It is this analyst's viewpoint that IGF is oft overlooked and not considered because of the ongoing urban "IT" myth that IBM is difficult to do business with. IGF is a market leader in business solution financing and contributes 4%, or $4 billion, to IBM's yearly revenue.

For IT decision-makers, especially in the SMB, IGF is worth considering when researching lending organizations and comparing rates and terms. While, as in any business decision, it is necessary to consult with the financial arm of the organization as well as understand company policies and both short- and long-term business requirements, suffice it to say that IGF should make the short list of lending institutions.

For more information about IGF promotions and offerings, visit the IBM Hardware Financing.

The Oft Confusing but Changing World of CBU Ts and Cs

IBM is responding to customer demand and to volatile and changing times during which customers must employ new backup and disaster recovery plans and, if they have not already done so, plan for high availability (HA) solutions. Natural disasters, terrorism, and federal regulations such as the Sarbanes-Oxley Act of 2002 (SOX) are compelling customers of all sizes to formulate viable and compliant backup and disaster recovery plans and implement them sooner rather than later.

While it may sometimes be hard to believe, IBM is listening—and not just to its large user group, affectionately known as LUG, but to its customers in mid-sized businesses, many of whom represent highly competitive industry verticals such as finance, retail, and wholesale distribution and are encountering the business requirement of providing uninterrupted 24x7 service to customers.

To this end, the IBM STG has expanded the CBU Editions for System i. Building on and extending its July 2006 announcements, IBM has pretty much provided customers that seek to purchase a System i CBU system (which would be a separate but in most cases complementary footprint) the ability to activate additional standby processors for production use. IBM is giving customers the opportunity to temporarily transfer the license of an optional activated processor on the primary system to a second processor on the CBU box when the primary processor is offline during planned or unplanned downtime, including testing, backup, or failover.

Clear?

OK, let's try to unpack this. Heretofore, the System i CBUs were restricted to specific n-way 5xx models. Now, IBM is creating CBU Editions to support System i550, i570, and i595 Standard and Enterprise Editions, including Enterprise Enablements (i.e., the 5250 hardware feature).

It is often said that a picture paints a thousand words. Since this analyst has limited space in this article, perhaps the following chart will help to represent this announcement in more cogent detail.

(Source: IBM; Reprinted with permission from IBM)

Some additional takeaways from this announcement include the following:

• Customers will now have the ability to granularly build an HA system, beginning with disaster recovery.
• Customers will be able to permanently activate processors to use a CBU for disaster recovery initially and grow the system into HA over time.
• The primary System i5 must be the same model of a capacity equal to or greater than the CBU box the customer is buying. For example, one would not purchase an i550 to support an i570; however, an i570 8-to-16 way primary could be supported by an i570 1-to-4 way, 1-to-8 way, or 2-to-16 way.
• The July-announced System i570 2-to-16 way and System i595 4-to-32 way CBU Editions for medium to large enterprises are now generally available.
• The new System i550 1-to-4 way, i570 1-to-4 way and 1-to-8 way, and i595 2-to-16 way CBU Editions will be available later this month.
• Upgrades are available into i5xx CBU Editions from System i Models 825, 870, and 890 systems.
• HA ISV's are providing complementary offerings and options.

While the expanded and more flexible CBU offering can be "a good thing," especially for mid-sized and larger enterprise customers that wish to expand their backup and disaster recovery contingency efforts as well as grow into HA, as with all offerings and programs, IT decision-makers must purchase and implement based on business requirements. It is undoubtedly critical that IT decision-makers thoroughly understand the Ts and Cs of this new offering and their applicability to their current and planned hardware topology. In this way, they would be better prepared to develop a forward-looking IT plan and make the business case for deployment of this (and any) technology. Also, IT decision-makers should be advised that they must register their System i Capacity BackUp Editions.

Further detailed information can be found in the IBM Hardware Announcement Letter. Moreover, System i customers can learn more about HA and receive training on the new CBU Editions at the Fall 2006 COMMON Conference and Expo (September 17–21, 2006, in Miami Beach, Florida).

All Good Things...

As is true about the cycle of life for all things, System i computer hardware notwithstanding, IBM STG last week also issued a Withdrawal Announcement for select System i products. While it is beyond the scope of this article to provide a complete review and analysis, it is hoped that the MC Press readership will visit the embedded link above for more details.

...Must End

All in all, it is shaping up to be an exciting third quarter for IBM and its customers. Normally, the summer doldrums inspire inertia, rather than activity, for many technology companies. This analyst would recommend that IT decision-makers remain vigilant and continue to watch the proverbial landscape; it is changing.

Maria A. DeGiglio is President of, and Principal Analyst for, Maria A. DeGiglio & Associates, an advisory firm that provides clients with accurate and actionable information on business and technology initiatives. You can reach Ms. DeGiglio at This email address is being protected from spambots. You need JavaScript enabled to view it..

Maria DeGiglio is president and principal analyst of Maria A. DeGiglio & Associates. Current clients of Maria A. DeGiglio & Associates include the Visiting Nurse Service of New York ; Experture, LLC; and MC Press. Ms. DeGiglio has more than 20 years of experience as an IT consultant, industry analyst, and executive. From 1997 to 2005, she worked for Andrews Consulting Group and the Robert Frances Group.

 

Ms. DeGiglio received her Masters Degree in Health Advocacy from Sarah Lawrence College and graduated Cum Laude from Cornell University with a Bachelor of Arts Degree.

 

 

Ms. DeGiglio has worked with IT and C-level executives to enable IT alignment with business goals and to implement best practices. She has experience and expertise in both large enterprises and in small- and medium-sized business. Ms. DeGiglio has authored over one hundred articles, reports, and white papers.

 

 

Since 2004, she has worked in the healthcare industry and in health IT investigating the legal, ethical, and regulatory aspects of creating, implementing, and exchanging electronic health records (EHRs). Ms. DeGiglio is an expert in security, privacy, and HIPAA regulatory compliance.

 

 

Ms. DeGiglio may be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..

 

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