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IBM, Novell to slash Linux prices for mainframes

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The pricing deal

Now, the pricing deal that is in the works. The basic license cost for SLES 11 (and any SLES release for that matter) on IBM mainframes is $11,999 per engine for a one-year contract. That gets you installation support and Web support thereafter. A standard 9x5 business hour contract with human beings providing support for a year costs $15,000 per engine, and for premium 24x7 support, it costs $18,000. With this impending promotion, basic SLES 11 support prices per mainframe engine are being cut 40 per cent to $7,199, standard support is being cut 32 per cent to $10,200, and premium support is being cut 27 per cent to $13,200.

If mainframe shops want to save some additional bucks after that, they can get a three-year support contract at 35 per cent of list and a five-year contract at 47 per cent off list. This can be some pretty substantial savings. A five-year SLES 11 premium support contract runs $44,999 per engine after the discount, which works out to $9,000 per engine. This promotion will be offered on the midrange System z10 BC mainframes (that's short for Business Class, and offering from 1 to 5 mainframe engines), not the full-blown z10 EC machines (short for Enterprise Class, and spanning from 12 to 64 engines). This promotion will run until December 31, apparently. It is not clear when it will be launched, but probably this week or next.

According to a presentation from Novell covering the promotion, the company has over 1,300 customers running Linux on IBM with over 4,000 IFLs using one version of SUSE Linux or another. In 2007, which apparently was a bumper year, Novell's Linux was plunked down on 1,700 mainframe engines. At around $100,000 per mainframe engine, that would have accounted for about $170m in mainframe revenues for IBM just for the engine cores alone, not counting memory, peripherals, support, database, middleware software licenses, and so on.

While all of this discounting is good news for mainframe shops - who apparently can push utilization on the mainframe engines up to 70 or 80 percent running Linux, according to Novell - SUSE Linux on x64 iron is priced based on the system level, not the core level as it is on a mainframe. A basic one-year support contract costs a piddling $349. A standard contract on x64 iron costs $799 per year per system, and the premium support costs $1,499. Licenses for support for Itanium and Power servers are priced by Novell at the socket level and cost $750 per socket for a basic contract for a year, with a standard contract costing $850 and a premium contract costing $1,000.

Let's do some math just for fun. On a five-core z10 BC mainframe, even with the discount deal that IBM and Novell will announce, you're talking $66,000 for one year if premium support. That is a little bit more dough than it would cost to get the same level of hand-holding for SLES 11 running on two whole Power 595 machines with 128 cores. Now, if you want to get a really crazy comparison, look at what it would cost for premium support on a 96-core "Dunnington" Xeon 7400-based server.

At $1,499 per year, that's 44 servers, or 4,224 cores, of processing capacity compared to the cost of supporting those five mainframe engines. Even if you only want to compare to a two-socket server to be more fair to the mainframe, you can get eight Xeon Nehalem EP cores and twelve Istanbul Opteron cores into a single box today, which works out to either 352 or 528 x64 cores for the same $66,000 as it takes to support five mainframe engines for a year.

That is just an utterly embarrassing price disparity, no matter how good z/VM partitioning is. Proving once again that a monopoly is a terrible thing - unless you happen to own one.

Bootnote: After this story ran, Novell contacted El Reg to say that the mainframe Linux support discounts for SUSE Linux were actually announced in October 2008 and were set to expire at the end of 2009. And the extended support contract (which gives customers five years for the price of three or three years for the price of two) was originally announced in April 2008 and was set to expire on July 31, but was extended recently to December 31, 2009. ®

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