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March 1, 1999


By CBR Staff Writer

Just prior to announcing the refreshed Northstar AS/400e line, IBM Corp quietly cut tags on the existing AS/400e model 170 Invader servers, the current low-end of the AS/400e line that features lower prices than full-blown servers like the new 7XX models but which have limited memory and disk expansion and upgrade paths. IBM cut prices on the existing model 170s by 10% with list prices now ranging from $8,995 to $63,000. While these prices bring the old Northstar 170s, which were announced last September, in line with the two new Northstars – a low-end 170- 2289, which has about two-third the power of the 170-2290 plus a high-end dual processor 170-2388 that has a little more than twice the power of the former top-end 170-2386 – the price/performance of the new low-end 7XX servers with base 5250 interactive features is somewhat better. How much better depends on what machines you compare, but model 170s cost between $96 and $137 per CPW (an IBM power metric that is roughly based on the TPC-C benchmark test), while 7XX servers with base interactive features cost from $75 to $113 per CPW. IBM also cut memory prices for low-end AS/400s by 17% to $10 per megabyte and for high-end AS/400s by 18% to $18 per megabyte. Prices for raw disks were cut by 19% to 21%, and costs for disk capacity now range from $0.17 to $0.25 per megabyte (the fatter the disk, the lower the per megabyte price). Both the memory and the disks are also used in the new 7XX models. In addition to these price cuts, IBM has announced a few deals to try to drum up business in the first half of the year. First of all, IBM has also stopped charging for various System/36 system programs, which can be run on the AS/400 either alone or alongside OS/400 V4; in fact, up to three copies of SSP 7.5, the version of the System/36’s SSP operating system that was created to run on the Advanced 36 (IBM’s first PowerPC- based AS/400) and on subsequent AS/400s, can be run on a single AS/400. This is particularly important these days since the System/36’s hardware is not Y2K compliant and neither is the System/36-based SSP operating system that runs on it. But SSP 7.5 for the AS/400 does support date ranges from 2000 to 2039, and although that means it technically still has a Y2K problem, at least it is pushed out another 40 years. IBM plans to support SSP 7.5 until May 31, 2000, and will very likely push support out further if customers resist the move to OS/400. (The way the System/36 base behaves, there very likely will be SSP applications running on AS/400s in 2039.) The suite of programs that IBM is offering for System/36 customers who just want to get to new hardware and worry about updating their RPG II applications includes SSP 7.5, a data encryption feature for it, Assembler and Macro Processor/36, RPGII/36, BASIC/36, Business Graphics Utilities/36, COBOL Compiler and Library/36, Development Support Utility/36, Device Emulation/36, Utilities/36, Fortran IV/36, Query/36, Personal Services/36, PC Support/36, DisplayWrite/36 and language dictionaries in English, French, Spanish, Italian, Danish, German, Dutch, Icelandic, Norwegian, Swedish, Swiss and Portuguese for DisplayWrite. These would have cost a System/36 shop $9,285 to purchase, which is significantly more than the $6,195 a base model 170-2289, the new low-end of the AS/400e line. IBM clearly sees that it stands to gain more by keeping System/36 customers happy than having them fail to meet the Y2K deadline and end up either out of business, or worse yet, hating IBM for trying to profit from a bad situation that the vendor (like all system vendors) helped to create in the first place. In addition to the System/36 software giveaway, IBM has announced two similar and complex Year 2000 deals for AS/400 customers. The first, called the Model 170 Year 2000 Development Rebate promotion, offers customers rebates on equipment purchases if they buy a new model 170 for Y2K compliance testing and also buy either a new model 7XX or upgrade an existing system to one. The rebates range from $800 to $5000 on the model 170 purchased (the more powerful the machine, the bigger the rebate) and $4,100 to $50,000 on the 7XX servers and upgrades (same here) if customers act before April 13. For those who buy between April 13 and July 12, when this promotion ends, the rebates are cut in half. Under the AS/400e Countdown to the Millennium Rebate promotion, customers buying a model 170, 7XX or an upgrade to a model 7XX between now and April 12 get from $800 to $5,000 in rebates on model 170s and from $2,000 to $25,000 on new 7XXs and from $800 to $12,400 on 7XX upgrades. Once again, those who buy by April 12 get these full rebates; those who buy between April 13 and July 12 get half these amounts. Customers buying extra machines for high availability clustering can double up under this latter promotion.

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