Insisting that the climb-down was in train before Louis Gerstner took the helm, IBM Corp late Wednesday admitted that adding the Model Groups 90 and 100 for the top-end seven processor and eight processor models of the ES/9000 line was the software pricing straw that broke the camel’s back, it agreed to apply Model Group 80 pricing to software for the new machines, and killed Groups 90 and 100. The chastened company also promised that the general price hike for software in the US, which is by tradition announced in August, has been cancelled for this year. And the company has found so few users willing to upgrade to its new machines because of the software price burden that for large users, it has come up with an Enterprise Agreement for Software, which is essentially an agreement reached by consenting adults in private on just how much extra such users will have to pay if they want to move their software around and reconfigure machines. The concept of Value pricing or per-user and usage pricing, tentatively introduced at the launch of the new ES/9000s, is being confirmed and expanded. The concept of the software meter has been implemented by several of its competitors years ago, but, working with 800 users it will take IBM several months to perfect.
