Price changes mean that top-end 3090 users may pay 13% more for software, IBM admits
There is plenty of confusion over IBM’s new pricing regime for 370 system software, announced last week, and the company admits that it will depend on the particular user configuration and mix whether people will be better or worse off – but it is clear that the company regards its 3090-600S and 500S users as a captive market that has no alternative but to pay up and look cheerful. In its popular explanation of the changes, the company says that the revised prices for System/370 software are designed to link software cost more closely to the value received by the customer (come on, stop that cynical laughter). To the extent that it takes time to test and prove a new release of a key piece of software, the concession that means users have to pay only for one version of the software on each machine is clearly an improvement – and an inducement to go ahead an upgrade. A substantial number of additional software products are also being converted from Monthly Licence Charges to Graduated Monthly License Charges under IBM’s policy, first introduced with the 9370, of pricing software according to the size of machine on which it is to run. And the prices of some products are being increased to better reflect their value in the marketplace. IBM is also eliminating most Initial Licence Charges, but those had mostly gone already. And, IBM concedes, depending on the products installed and operating environment, customers may incur price increases or price decreases as a result of the revisions, and warns that price increases will be most prevalent at the high end of the processor group structure and decreases more prevalent at the low end. As an example, a sample configuration of the most current software installed on a 3090-120S processor will fall by 1%, but the same sample configuration on the 3090-600S, will suffer a daunting 13% increase. Recognising that in an America that may be teetering on the brink of recession, where many of the people who will have to pay more are those very same large traditional corporations that will be hurt most by a recession, IBM is making a concession to limit the impact on current operating budgets and allow for planning, the new and revised prices for Graduated Monthly Licence Charges will not go into effect until January 1, 1990, by which time any recessionary tendencies will be writ large: let’s be charitable and assume that IBM’s model of the US economy shows no slow-down at all with business in all sectors booming by the turn of the year. Under the Single Version Charging concession, where customers have licensed software under the One-Time Charge option, IBM will provide a credit to be applied when customers upgrade to the most current version of the software, and the credit can be applied to either the Graduated Monthly Lic ence Charge or One-Time Charge for eligible software.
Single Version Charging innovation
Single Version Charging eliminates duplicate charges for multiple versions of a program, so that charges for prior versions of key System/370 licensed programs are waived when they are replaced by current versions – when both versions are installed on the same machine. If the user finds he doesn’t like the replacement program and sends it back, the appropriate monthly licence charge will become due on the replaced version, unless it is also discontinued. IBM may request, annually, that customers verify the replaced product is still installed on the same machine as the replacement product. Where the old program is installed on a one-time charge or a graduated one-time charge, a time-based program upgrade credit is introduced. The credit amounts are variable and are based on the ratio of one-time charge to monthly licence charge and the length of time that the licence for the predecessor program has been installed under a one-time charge. The credit may not exceed the one-time charge of the replacement program, and may may be applied to either reduction of the one-time charge of the replacement
program or waiver of the replacement program’s graduated or standard monthly licence charge for a period consistent with the allowable credit. The waiver is non-transferable and any balance will be forfeited should the new program licence be discontinued. Time-base program upgrade credits replace the existing upgrade charges for affected licensed programs, so that if the new version costs more than the old, you pay the full new price and get a credit on the old one. Affected programs include DB2 2, IMS/VS 2, QMF VM and MVS, CSP/AD 3.2.2, CSP/AE 3, ISPF 3 for VM/SP and MVS, and SQL/DS Version 2. The Volume Purchase Amendments for Graduated Charges, VM Licensed Programs, Selected System/370 Licensed Programs; VSE Licensed Programs, the IX/370 Licensed Program and Telecommunications Licensed Programs are all withdrawn forthwith, although ones signed before August 1 are unaffected. There are two new Volume Purchase Exhibits, Graduated Charges for Application Programs and Selected System/370 Application Programs, containing many applications previously on the Graduated Charges and Selected System/370 Licensed Programs Exhibits. Details from your rep.
Many initial charges are eliminated
As reported (CI No 1,232), there is a 25% discount on one-time licence charges for OS/VS Cobol, VS Fortran, PL/I compilers, tools and libraries which expires December 29, but from January 1, 1990 there are big changes on most major products, with pretty much anything that currently carries a non-graduated monthly licence charge moving onto graduated charges, and initial licence charges are generally withdrawn from last week, which simplifies things a little. And withdrawal of the Volume Procurement Amendment Exhibit for System/370 Graduated Charges is compensated for by a discount on the one-time charge on VSE programs, DPPX/370 programs, VM programs, Cross System Programs and MVS programs for 9370 users whose machines fall into Processor Groups 10 to 20. The discount, which is available for orders placed by February 15 for programs to be installed by May 31, is 10% to run on machines in Processor Groups 10 and 15, and 7% in Groups 18 and 20. Volume purchase commitments are not required.
Key programs up 4.3% on 3090-600S, 500S
The tough news for 3090-500S and 600S users is that monthly licence and one-time charges for a string of products are going up: for example DPPX monthly licence charge rises 4.2% to $317, and there is a similar increase in the distributed systems licence option charges. The monthly licence charge on Transaction Processing Facility is up 4.3% to $24,500, and for High Performance Option by the same amount to $11,150. The one-time charge for DB2 is up 4.3% to $244,850, and similar increases affect C/370, Open Systems Interconnection, TCP, VM REXX, the MVS and VM of Adas and other products.
