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TUP Provides Lower Prices for IBM MLC Sub-Capacity Products

Last Updated: Wednesday, 23 January, 2013

IBM announced "Technology Update Pricing for AWLC" (US Announcement 212-320), a new pricing metric, with the IBM zEnterprise zEC12 (US Announcement 112-155) on August 28, 2012. "Technology Update Pricing for AWLC" (TUP) is an interesting metric as it does not define new prices within the tiers, but rather applies a percentage discount to the AWLC prices based on the installed MSU capacity of the site's zEC12 machines. These are the discounts for TUP:

  Number of zEC12 Full Capacity MSUs
  for a stand-alone server, or the          Reduction in
  sum of Full Capacity MSUs in an           monthly AWLC
  actively coupled Parallel Sysplex
  made up entirely of zEC12 servers
 

        4 -   45 MSUs                           2.0%
       46 -  315 MSUs                           4.0%
      316 - 1315 MSUs                           4.5%
     1316 - 2676 MSUs                           5.0%
     2677 - 5476 MSUs                           6.0%
     5477 - more MSUs                           7.0%

Evolution of MLC Tiers

One of the changes in the ongoing evolution of IBM's Workload License Charges that I continue to discuss in my writing and presentations is the changes in the tiers of the pricing tables. If you can remember the Parallel Sysplex License Charge pricing metric, which was announced in April 1994, the highest tier began at 316 MSUs. That is, the 316th MSU of the base feature of z/OS was 159USD. The 317th MSU was the same price, and so was the 1,000th MSU and 5,000th MSU. Each incremental MSU above 316, was charged 159USD. The same is true for many other products, that now offer sub-capacity. DB2 V7 (5675-DB2) was 71USD for the 316th MSU and every MSU above that is also 71USD.

When Workload License Charges was introduced in October 2000 IBM added new tiers beyond those of PSLC:

However only z/OS and full capacity OS/390 lowered prices at each tier level. DB2, CICS, IMS and other sub-capacity products only lowered prices beginning at 576 MSUs and continued the price from 576 MSUs at the higher levels. (refer to Announcement Letter 200-352, Dated October 3, 2000). Only with AWLC and z196 machines did CICS, DB2, IMS and others begin to lower the charge per MSU for the 876 and 1,316 tiers.

The tiers provide a price for each MSU within the range of the tier. For example whether DB2 is charged 50MSUs, or 950MSUs, or 15,000 MSUs in a PricingPlex, the first three MSUs are charged the same base rate for the product. "Technology Update Pricing for AWLC" changes this. Referring to the table above, at 50 MSUs (of installed capacity) the AWLC prices are discounted 4%. At 950 MSUs of installed capacity AWLC prices are discounted 4.5%. That is, the charge per MSU for all the tiers is lowered by 4.5%.

New Levels of Discounts for Larger PricingPlexes

The TUP range offers discount of 6% with an installed capacity of more than 2,677 MSUs, and a 7% discount if your installed zEC12 capacity is 5,477 or larger. Not only do these discounts lower the charge per MSU at these higher levels, but they apply to all the lower tiers also. The effect is new "virtual tiers" of pricing shown in the blue shaded columns on the right of Figure 1.

Figure 1: z/OS Base Pricing Tiers Over Time Including TUP

While any site using zEC12s will see a reduction in MLC Charges due to "Technology Update Pricing for AWLC" and the transition pricing programs that IBM offers TUP offers additional levels of discounting not available previously.

Sub-Capacity Products Other Than z/OS

DB2, CICS and other MLC products do not lower the charge per MSU at the highest tiers, though as Figure 2 shows the for DB2 V10, the starting point of the highest tier has increased from 316 MSUs with PSLC to 576 with VWLC to 1,316 MSUs with AWLC. The green background shows the tiers where the charge per MSU is not changed from the next lower tier.

Figure 2: DB2 V10 Pricing Tiers Over Time Including TUP

For these products TUP continues to lower the charge per MSU above 1,316 level of AWLC. There is also value to TUP below 1,316 MSUs as TUP discounts start with as few as 4 MSUs. (Even though the smallest zEC12, the Model 401 is only 30 MSUs.)

Every zEC12 Site Pays Less MLC

As shown above whether by the transition programs for mixed hardware types or with TUP every site using zEC12s will pay lower monthly MLC charges. The only exception would be if you are still using the older PSLC license charges. There may be some sites using PSLC and Measured Usage, but I think that is now a rare pricing configuration. Even full capacity Workload License Charges sites will realize these savings. As part of a complete analysis for acquiring zEC12 machines, understanding the impacts on software price changes is important. These changes only effect the IBM products that offer sub-capacity MLC pricing. IBM's IPLA products and those of other software vendors do not offer savings with the zEC12 machines.

Last Updated: Wednesday, 23 January, 2013