IBM iSeries subscription plan aims to simplify IT budgets

IBM has followed up its recent pay-as-you-go plan for lower-end Power 10 servers with its first subscription plan for iSeries server users.

The intent of the IBM i System Subscription is to make it easier for SMBs' budgets, with more consistent annual payments over the course of the subscription license, IBM said. Licenses can range between three and five years, with renewal options for an additional one or more years.

The i System Subscription includes the Power S1014 server and the latest version of the i System operating system, development tools and the necessary services to support the continued operation of users' existing environments.

The subscription is billed on an annual basis, with users able to choose their service package starting for around $55 per user per month under IBM's i PO5 license, IBM said.

Some analysts and consultants believe the subscription plan will appeal to SMBs, particularly those lacking IT personnel.

The issue right now for many companies is Capex vs. Opex. They don't want to own everything because if they own it they have to manage it, and they don't have the technical resources to do that.

"The issue right now for many companies is Capex vs. Opex," said Jack Gold, analyst and president of J. Gold Associates. "They don't want to own everything because if they do they have to manage it, and they don't have the technical resources to do that -- especially when it comes to security."

IBM is following in the steps of some competitors, including Dell with its APEX program and HPE with its subscription management service.

"All the cloud guys are basically rental," Gold said. "If users can write one check every month and be done with it, that's a real benefit to them." IBM describes the shift toward pay-as-you-go as part of a cultural trend.

"Subscription-based products and services are transforming the way we live, think about the way we consume music via monthly streaming services," said Dylan Boday, IBM's vice president of hybrid cloud, systems and AI. "Businesses are starting to look at IT solutions the same way. They want to flexibly consume services rather than owning the hardware, software and storage."

Understaffed IT organizations can utilize IT services through IBM's technical services organizations.

"We retain ownership of the server and will ship all the services along with it," Boday said. "Users only make their monthly payments for whatever services they choose."

IBM iSeries users in particular could find it easy to adapt to the new subscription plan because that server model has always been sold to them bundled with a proprietary operating system and database.

"ISeries users are one of the few who got a lot of what they needed in one box," said Frank Dzubeck, president of Communications Network Architects. "The outstanding difference now is they are getting everything they need, from hardware to many different services."

The subscription plan was born out of users pushing IBM to alleviate increasing budgeting pressures they face by creating solutions that feature cloud-based economics.

"They want to remain on-prem, keep their technology current and simplify their operations," IBM's Boday said. "This [plan] gives them a way to ease those pressures with the additional benefit of redeploying resources to other ongoing projects."

Subscribers can upgrade to the next generation of technology automatically when it becomes available, serving to preserve investments made in key applications and hardware platforms, the company said.

As an Editor At Large for TechTarget Editorial, Ed Scannell is responsible for writing and reporting breaking news, news analysis and features focused on technology issues and trends affecting corporate IT professionals.