Two weeks ago, IBM unveiled its first production server running the much-awaited POWER6 processor. That raised fresh questions among customers about when POWER6 chips will come to the System i. Fortunately, IBM is providing its field force and Business Partners with answers to those questions. Today, I am going to share those answers with you and help you decide how to act on the information.
When IBM unveiled its first POWER6 server on May 21, the box on the dais was none other than a System p Model 570. As the only server that currently offers the new chips, the revamped p570 is a formidable system. Like older p570 configurations with POWER5+ chips, the new p570 comes with one to eight dual-core processors. However, the POWER6 cores run at much faster clock speeds of 3.5, 4.2, and 4.7GHz. These speeds, not to mention refinements such as larger L2 processor caches and a processor bandwidth of 300GB per second, give the new p570 dramatically better performance. When running the TPC-C benchmark, for instance, a 16-core p570 clocked at 4.7GHz can crank out 1,616,162 transactions per minute (tpmC). That is 57% more than a p570 running the same number of POWER5+ cores at 2.2GHz.
Whither the System i?
While the revamped p570 is an impressive box, most System i users are less interested in the server itself than in IBM's plans to offer POWER6 on their system of choice. In a smart move, IBM briefed its sales teams and resellers about those plans in the days following the p570 debut. According to sources within these groups, IBM will not roll out POWER6 versions of the System i product line until 2008...with one exception. During the second half of this year, the computer giant will announce a System i Model 570 with the same POWER6 chips as the p570.
Before you get too excited about this news, there are two things you should know about the POWER6-based i570. First, the new system will require you to run i5/OS V5R4 at the latest System Licensed Internal Code (SLIC) level. For many customers, running an i5/OS release that current is impossible or just too risky. By the way, all System i models running POWER6 will require V5R4 with the latest SLIC or the next i5/OS release that is due in 2008.
Second, you should know that IBM will do extensive integration testing of i5/OS V5R4 on POWER6 over the coming months. However, customer beta testing of V5R4 on POWER6 servers will probably not start until July. To give IBM time to stabilize V5R4 on POWER6, many or most customers will want to hold off on installing a POWER6-based i570 until the end of this year. By that time, many customers may decide to wait until POWER6 rolls out on other System i models during the first half of 2008 just to see what other options are available to them.
In short, the upcoming POWER6-based i570 will initially be a "special circumstances" system that does not replace the POWER5+ configurations of the model. If you really need the added performance and can run all of your applications on V5R4, it may be worth your consideration. If you do not fit in this category, you should buy a POWER5+ configuration or wait until POWER6 becomes a good fit for your company.
An Offer You Can't Refuse?
Speaking of waiting, IBM does not want the POWER6 rollout to convince customers to freeze System i spending until next year. To try to prevent that, it has announced attractive promotions on current POWER5 models. A new System i Upgrade Promotion gives customers significant rebates if they upgrade an iSeries Model 810 or 825 Standard or Enterprise Edition server to a System i5 Model 520, 525, or 550. The rebates range from $8,250 to $29,000 if the upgrade is purchased no later than September 30 of this year. After that date, you can still get a rebate for upgrades acquired before November 16, but the rebate amounts decline by 15%.
If you have an older iSeries than the 810 or 825, you can still get a nice rebate via the System i Trade-in Promotion. When IBM announced the promotion back in April, it offered users of AS/400 5xx, 6xx, Sxx, and 7xx servers as well as the iSeries 250, 270, 820, 830, and 840 the chance to trade in their servers for a new System i5 Model 520 or 550 Enterprise Edition. In exchange, they receive a credit ranging from $5,400 to $65,000 (depending on the cost of the replacement server) if they install the Model 520 or 550 before June 30. If they install the replacement server after June 30 but before September 30, they get a slightly reduced credit.
On May 22, IBM expanded its trade-in program by making the venerable AS/400 Model 170 an eligible "trade-in machine." It also put the new System i Model 525 Express (one of the two models that are sold on a per-concurrent-user basis) on the eligible replacement machine list. To get a trade-in credit when purchasing a Model 525, you need to buy the "Configuration #3" version of the system that comes with unlimited users. By the way, IBM also added the Model 525 Capacity BackUp (CBU) to a promotion that gives rebates to customers who buy or upgrade to an eligible Model 5xx and also acquire a CBU server.
These announcements don't give price breaks to customers who already own a System i5 Model 5xx and are wondering if they should upgrade now or wait until the POWER6 models come out. They also do not apply to anyone considering a new Model 5xx who has no machine to trade in or upgrade. If you are in one of these positions, IBM and its Business Partners are ready to offer you special bids on existing Model 5xx upgrades and new models if you buy this year. Last week, for instance, one source told me that IBM could offer special bids to customers who buy a POWER5+ Model 570 now rather than a POWER6 version next year. IBM could craft bids that make it financially attractive to skip POWER6 altogether by deploying POWER5+ servers now and then upgrading to POWER6+ servers in 2009 or beyond.
In short, IBM will be eager to win your business for the rest of this year and will have plenty of discounts and deals to offer. As such, the coming months should be one of the best times to replace existing systems or buy new ones. Of course, there will always be the nagging question at the back of your mind of whether you could swing a better deal with a POWER6 model next year. Realize, however, that IBM will feel less pressure to win your business in 2008 when it has shiny new iron to sell. If you do not need the latest and greatest technology, give serious thought to entertaining a proposal on a current model. If you negotiate wisely today, you will probably come out ahead tomorrow.
Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at
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