The price of mainframes is plummeting to the point at which IBM Corp is now offering to sell its larger systems, those with at least 1,000 MIPS, at $2,000 per MIPS. If so, that’s a faster drop in pricing than anyone had predicted. Technology News of America reports the same machines had been bid at about $3,000 per MIPS when they were first introduced last spring. IBM is aid to have slashed prices to stimulate demand.
The reports says maintenance on these machines can be as low as $15 per MIPS per month for users who will prepay for 24 months or longer. But customers buying smaller mainframes are unlikely to get offers this attractive.
It suggests that users of non-IBM mainframes are now in an excellent position to batter Big Blue down further on pricing and that it may even be expedient for IBM shops to go to Amdahl or Hitachi for new iron for a year or two to get IBM’s best offer next time around. But both those vendors are pretty interested in winning back turf from IBM and they know price is the key. So, users who are willing to switch suppliers for each successive systems consistently get the best hardware values.
The report also notes that the real money in the mainframe market is being made on software. License fees for OS/390, DB2, compilers and the rest of the stuff most big shops need can run $200,000 a month for a 1,000 MIPS mainframe, regardless of vendor. In two years, the total software costs exceed hardware costs, with actual costs depending very much on the specific software packages a customer installs.
