By Timothy Prickett Morgan
With its latest Unix implementation, AIX 4.3.3 (see separate story), IBM Corp is switching from its former AIX upgrade protection plan to a new AIX Software Subscription plan that IBM has been pushing in the AS/400 market for a little more than a year. Under the old AIX protection plan, customers who wanted to pay a little on the front end for their AIX and related system software licenses would be guaranteed free release upgrades within an operating system version. With Software Subscription, customers pay an annual fee and IBM agrees to keep the software current. As is the case with AS/400 customers moving to OS/400 V4, those moving to AIX 4.3.3 are not being asked if they want Software Subscription, they are being told they need it. The soft sell is that it helps make budgeting simpler, but an alternative to Software Subscription, such as leaving the customer alone to decide when they want to upgrade their operating system and related tools, is not being presented.
For one thing, IBM is very, very keen on leveling out software licenses fees and regularizing them so it looks like a monthly rental stream. This is how IBM has always sold mainframe applications, and actually, customers can no longer buy a license to OS/390 – they have to rent it month-to-month since IBM has withdrawn basic one-time charges for the software. And for another, if IBM can get RS/6000 customers to get in lockstep with AIX code under Software Subscription, then it makes the job of supporting customers a whole lot easier because there aren’t so many releases running out there in the installed based. IBM is officially supporting six OS/400 releases and six AIX releases (all releases of AIX 4.2 and 4.3) as we move into the millennium changeover, and is probably expending lots of effort trying to get customers to move to modern releases because, let’s face it, no one wants to alter a server that is working just fine. Under Software Subscription, IBM would like to get customers used to applying software patches as they become available and moving to new releases almost as quickly. Such behavior will make the midrange customer base more nervous than not keeping their software up-to-date already does.
It will be interesting to see what the RS/6000 base does. A fairly large percentage of customers installing new AS/400s have signed up for Software Subscription – about 80% of new customers in the US and about 70% of customers in Europe, with variations depending on the country – and about 40% of customers moving up to V4 of OS/400. The AS/400 software subscription deal offers one to five year pre-pay options. Most AS/400 customers have chosen the three year option, which gives them a 5% discount; a five- year pre-pay on AS/400 Software Subscription yields a 10% discount. AS/400 customers running old V2 or V3 releases of OS/400 were also given a 15% discount of they move up to V4 and sign up for Software Subscription. Some did, but most did not. If the RS/6000 installed base is as hesitant as the vintage AS/400 server base has been, IBM may have to offer similar or even better deals to its 125,000 customers to get them to update their AIX software to V4.3.3 and keep it more or less current from here on out.
Prices for Software Subscription for AIX vary depending according to what programs customers use. The annual charge for Distributed File System (DFS) V2.2 for AIX run from $21 for a single client to $125,928 for a 15,000 user pack, plus $1,296 for 1 to 4 server installs. (As customers add DFS servers, the price per server drops dramatically. For 50+ servers, it costs $6,924 or $138 per server per year.) TXSeries transaction monitoring software costs $450 per server and $2,250 for an unlimited number of users each year. VisualAge for Java, a development program that will change a lot in the coming years, costs a whopping $745 per year per user, with 250 users costing $186,188 per year. Plain AIX users and network users cost $18 per year. Fast Connect costs $250 per server per year. C costs $195 per user per year and C++ costs $620 per user per year. Other AIX features are in the same rough price range. If you do the math, it looks like the typical RS/6000 shop could spend between $50 and $100 per user per year to maintain their AIX code. That is roughly between two and three times the amount they have to pay in basic hardware maintenance, and it is unclear if they will be happy about it. IBM says, by the way, that it will honor existing AIX Upgrade Protection contracts, but it will not renew or extend or modify them.
