Article Navigating the waves of change – Decoding IBM’s software price surge
Navigating the waves of change – Decoding IBM’s software price surge
By Insight UK / 21 Feb 2024 / Topics: Software
In the dynamic realm of enterprise software solutions, IBM has always been a stalwart, empowering businesses with tools for enhanced productivity. However, the recent surge in software prices has sent shockwaves through the business world, leaving many grappling with the implications. Here I unravel the intricacies of IBM’s latest software price hikes and explore the potential ramifications.
IBM’s Software Price Hike – What you need to know
Let’s take a closer look at the most recent pricing updates for IBM software and the potential impact they may have on your business.
IBM recently announced price increases for its distributed software products, which include popular offerings such as IBM WebSphere, IBM MQ, and IBM DB2. In addition, the company is making modifications to its Passport Advantage program, which is used by customers to purchase and manage their IBM software licenses.
The increase quantified
IBM has increased all Passport Advantage Eligible Perpetual, Subscription Licenses by 24% and SaaS products by 15% (Prices are subjective to the specific regions) announced by IBM in February of this year.
Following more recent announcements, IBM sets to increase prices further in 2024 by an additional 6% globally and 25-26% on some Object Storage prices. It is more important than ever to get a grip and control your organisation's spend on IBM software contracts.
The price increases will affect both new and existing customers, with some products seeing increases of up to 20%. This move has been met with criticism from customers, who argue that the higher costs could put a strain on their budgets and make it difficult for them to maintain their current levels of investment in IBM software.
In response to these concerns, IBM has stated that the price increases are necessary to help the company continue to invest in new products and services, as well as to keep pace with inflation and rising operational costs.
Furthermore, IBM will be phasing out the use of perpetual licenses in favour of a subscription-based model. This means that customers will need to renew their licenses regularly to continue to use IBM software. While this change will not affect existing licenses, it may impact customers who were planning to purchase perpetual licenses in the future.
Latest on Cloud Paks
IBM's latest pricing updates primarily focus on its cloud offerings, particularly its Cloud Pak solutions. Cloud Pak is a range of containerized software solutions that leverage Kubernetes to enable businesses to run their applications seamlessly across different cloud environments, providing flexibility and ease of management. IBM has recently simplified its pricing for Cloud Pak, making it easier for businesses to understand and manage their investments.
Cloud costs are set to increase by 3% globally, but with further increases of 5.6% in UK, and 5.5% in Europe.
Latest on IBM System Z
IBM has announced increases in one-time charges (OTC) and in subscription and support (S&S) recurrent license charges (monthly and annually) on selected IBM Z software products. Price increases will be approximately 6%
For businesses looking to modernize their mainframe environments, IBM has also announced pricing updates for IBM Z. This platform offers a range of solutions that help organizations ensure high availability, security, and scalability across their enterprise systems. IBM has simplified its pricing for IBM Z, making it easier to apply the necessary measures to optimize your mainframe systems.
IBM Technology Lifecycle Services
Effective January 1, 2024, IBM has announced a 12% price increase on selected part numbers for Appliance service uplifts including Business Critical, Media Retention, and HW Service Days delivered by IBM’s Technology Lifecycle Services teams.
Conclusion
Overall, the changes to IBM's distributed software pricing and Passport Advantage program are likely to have a significant impact on customers. While IBM is attempting to justify the price increases and modifications as necessary for future growth and investment, it remains to be seen how these changes will be received by customers who may be considering alternative software vendors as a result of the increased costs.
If you’re unsure of or need help to quantify and mitigate the impact of the IBM price increases for your organisation, contact me to discuss how we can help.
