IBM dreams up new ways of deriving software revenues with its AS/400 announcements
IBM’s Tuesday announcement this week turned out to have been exhaustively and accurately previewed, and was thinner than usual on the intriguing little ancillary items that don’t grab headlines. Almost all the ones there were were in the AS/400 arena – and the most striking is a new set of pricing rules introduced with MAPICS, but presumably to spread to other applications. It looks as if it is intended to squeeze even more cash out of the user because the one-time charge option is replaced by a first year charge and a (much smaller) continuing annual charge.
The new top-end B70 processor gets its own model group for software pricing purposes
On the software pricing front, the new B70 9406 processor falls into a new Processor Group K5, which is added to the existing ones, so that each processor in the line continues to occupy its own unique group for software pricing. There are new K5 prices for OS/400, AS/400 Office, RPG/400, Cobol, Basic, PL/I and all the other key software products that were announced for the machines last June; IBM did not detail the new prices. A new series of prices for the B70 similarly apply to the AS/400 applications families such as Construction Management and Accounting System II, Distributors Management Accounting System, AS/400 Hotel Reservation and Guest Accounting System, AS/400 MAPICS II and AS/400 MAPICS/DB, and so forth.
New pricing rules accompany MAPICS/DB
Among the new applications and application enhancements offered for the AS/400, AS/400 MAPICS/Data Base has been extended with the modules IBM had been promising. MAPICS/DB is designed to enable new and current MAPICS users to get the benefit of the MAPICS II integrated applications combined with the relational database and architecture of the AS/400. The modules are Sales Analysis, Capacity Requirements Planning, Financial Analysis, Master Production Schedule Planning, Purchasing, Forecasting, and Production Monitoring and Control, and IBM reminds users that the announcement fulfills its Statement of Direction on MAPICS made on June 21, 1988 to provide the same application functions that exist in AS/400 MAPICS II on the AS/400 MAPICS/DB architecture. The company also announced upgrade charges and migration aids for System/34, 36, 38 and AS/400 MAPICS licensed programs. The company also said that AS/400 MAPICS/DB Cross Application Support, Payroll, Accounts Payable, Accounts Receivable and General Ledger are now available. IBM has also changed the rules for paying for MAPICS/DB, tearing up its old price list – only the old monthly licence charge still applies. For the rest, an annual payment option is introduced under which the first payment consists of a primary licence charge and an annual license charge; the annual licence charge applies each year thereafter. As an example, the Payroll module costs $1,850 on a D5 to $4,140 on a J5 – and IBM fails to come up with a price for the K5 – for the combined primary licence and first annual licence charges; the annual licence charge thereafter is $250 on a D5 to $560 on a J5. Those who want to pay a basic monthly licence charge instead pay $360 a month regardless of processor size, which means that users on a baby machine have effectively paid for the first year licence under the option in just over five months; however on a K60, it will take them two weeks less than a year before they have paid as much as it would cost them under the new option for the first year. The new modules for MAPICS/DB don’t arrive until March 1990, one year from now.
New Co-operative program offerings
Under the Co-operative Software Programme there are three or four new offerings – Prism, which Marcam Corp, which is designed to provide manufacturing planning, control and cost accounting to process industries. It is most applicable in the food processing, chemical, metal glass, rubber and consumer product industries. It comes in three modules – Foundation, Resource Management and Resource Processor, and is offered on a one
-time charge only, $12,000, $15,000 and $13,500 for the three modules on a B20 up to $36,000, $46,000 and $41,500 on a B60 – and once again there are no prices given for the B70. Availability is March 3. From Executive Technology Data Systems Inc comes Small Business Accounting and Financial Reporting System, a client accounting system includes with Quick Client Set-up, Journals and General Ledger, Financial Statements and Supporting Schedules, Payroll Tax Reporting, Working Trial Balance, Fund and Operating Budget Reports, Commercial Accounts Payable and Accounts Receivable; again charges are one-time, varying from $6,500 on a B10 to $10,400 on the B40 up. It’s already available in the US. And from the same source comes Time and Expense Management System with Management Reporting, Work in Process Control, Billing, Accounts Receivable Control, Invoices, Statements, Work Scheduling, Due Date Monitoring and Manpower Planning. It’s $4,500 on a B10 to $7,600 on a B40 up and is already available.
Trade-in option for used memory boards
In the hardware corner, the company has come up with a new option for AS/400 9406 processor users in the shape of a deal whereby those who upgrade the feature memory installed in their machines and replace a previously installed (IBM manufactured, of course) memory board now have the option to return the replaced memory board for credit toward the purchase price of the new feature memory card on a one-for-one basis – but the company didn’t give details of the credits on offer. The changes in the disk support and other features mean that the Total System Package preconfigured models are now available with the additional features, so that there are packages including the additional memory and the 600Mb version of the 9332 disk drives; a second 9335 A01 controller is now an option on the 9406 P40-5300 configuration; the 9404 Expansion Unit feature is available as an option on the 9404-P20 to house the additional disks, floppy and cartridge tape unit; the new 4234-012 printer is included on the AS/400 Total System Package menu of input-output devices; further licensed programs are available, and all the features can be packaged from first shipment dates given in CI No 1,121.