Mainframe Software Pricing Myth

I’m surprised by a particular survey question in Gartner’s "Survey Results Provide Insight Into IBM Mainframe Market Momentum" (7 February 2006 ID Number: G00137484). In essence,(since this is copyrighted material I can’t be too specific) mainframe users are blaming ISVs for the high costs of mainframe computing. Interestingly enough I was at the Gartner Conference last year when the polling was done, and as a vendor, I did not vote that way. In fact I guess you might say that the poll reflects vendors and mainframe users.

The point is that mainframe software costs more than distributed software for a number of sound economic reasons and thus it is more expensive. But as most users know it has a much more rapid ROI, and provides more business value (savings) and thus delivers more value.

What is most disturbing is that mainframe software provided by vendors other than IBM has been relatively flat for years. I know for fact that is true with BMC mainframe software and market intelligence supports that the vendor constantly raising the price of software is …. IBM. Few users may have figured this out, and certainly procurement is still in the dark about the fact that with IBM IPLAs you don’t license a product you license a product number. While this may not seem like much … you need to upgrade the product every time the product number changes, regardless of ongoing maintenance. This upgrade has nothing to do with capacity changes; it is totally dependent on when a new version of the product is introduced by IBM. With each product number change carries an additional upgrade charge. Then there is the subsystem licensing, i.e. MLCs. When was the last time a new release of DB2 or IMS didn’t go up?

With BMC Software you license a product … reflected by a product name. Your maintenance insures the best possible support as well as your entitlement to new release and versions of the product as long as maintenance is maintained. I’ll let you do the math … but it is clear to see why they can afford to give away a free software license when in a competitive pinch.

The savings that IBM has delivered in regards to the hardware as been taken away with the price increases the levee on the software... and that is a reality!