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Competitive Costs

By Destination Z posted Mon December 23, 2019 03:34 PM


Much of the initial attention on the IBM z14 revolved around the machine’s pervasive, automated encryption. With the new IBM Z, however, IBM also announced upcoming new container pricing along with three new container pricing models and more to come.

Container pricing implied overall cost savings, but also greatly simplified deployment. IBM suggested competitive economics too, especially when benchmarked against public clouds and on-premises x86 environments.

Software Prices

At the initial z14 briefings, IBM reiterated it was committed to lower software prices. First, IBM’s software pricing policy of reducing software costs on latest hardware technology continues with the z14 through the Technology Transition Offerings. Additionally, the introduction of container pricing offers a whole new approach to pricing for new workloads introduced onto z/OS. When pressed on the container pricing point, Ray Jones, vice president, IBM Z Software and Hybrid Cloud, clarified: "This is not the strategy to lower the bill, but to make it affordable to add new workloads."

IBM’s container pricing is being introduced to allow new workloads to be added onto z/OS in a way that doesn’t impact an organization’s rolling four-hour average, can support a deployment option that makes the most sense for the organization’s architecture, and facilitates competitive pricing on a metric and a price point relative to that workload.

For example, one of the Day One use cases for container pricing is for instant payments workloads. That workload will be charged not to any capacity marker, but to the number of payments processed. With that comes a new price grid, set to be highly competitive with the price–per-payment starting at $0.0021 and dropping to $0.001 with volume. “That’s a very predictable, very aggressive price,” Jones says.

Co-Located Workloads  

Container pricing applies to various deployment options—including co-located workloads in an existing LPAR—that present line-of-sight pricing to a solution, IBM states. The new pricing promises greatly simplified software pricing for qualified solutions, flexible deployment options and competitive economics that are directly relevant to each solution. It even offers the possibility, IBM adds, of different pricing metrics within the same LPAR.  

The payments container requires the use of IBM’s software solution for payments, Financial Transaction Manager (FTM). It counts the number of payments processed, which drives the billing from IBM.

Initially, IBM introduced three container pricing workloads:

1.    Application Development and Test Solution: aggressive DevTest pricing
2.    New Application Solution: highly competitive pricing for new z/OS applications
3.    Payments Pricing Solution: business metric tied directly to payment volumes

To IBM, a container can be any address space, or group of address spaces in support of a particular workload, however large or small. (This shouldn’t be confused with Docker containers, which only run on Linux on the mainframe.) “Container pricing provides collocated workloads with line-of-sight pricing to a solution,” explained Jones at the initial briefing for the new Z.

With the new DevTest container pricing program, organizations can increase their DevTest capacity up to 3x at no additional monthly license charge (MLC) cost. Or an organization can choose the multiplier it wants and set the reference point for both MLC and one-time charge software.  

Payment systems pricing are based on the business metric of payments volume a bank processes, not the capacity utilized. This gives organizations much greater flexibility to innovate in a competitive environment, particularly in the fast-growing instant payment segment, for which this appears tailored. Capitalizing on the new per-payment pricing, Jones added, requires up-front licensing of FTM software.  

The container pricing options are intended to give organizations the predictability and transparency they require for their business. The pricing models are scalable both within and across LPARs, and deliver greatly enhanced metering, capping and billing capabilities. Container pricing for IBM Z is planned to be available by year-end 2017 and enabled in z/OS V2.2 and z/OS V2.3  


To understand the latest changes, you need to understand what IBM means by “container.” A container to IBM is an address space, or group of address spaces, in support of a particular workload. An organization can have multiple containers in an LPAR, have as many containers as it wants and change the size of containers as needed. This is where the flexibility comes in.  

The fundamental advantage of IBM’s container pricing comes through co-location of workloads to get improved performance and remove latency, thus IBM’s repeated references to line-of-sight pricing. In short, this is about MLC (four-hour) pricing. The new pricing eliminates what goes on in containers from consideration in the MLC calculations. The price of a container is just that. It won’t impact the four-hour rolling average except to produce a predictable cost.

Qualified Workloads  

To get container pricing, you have to qualify. The company is setting up pricing agents around the world. Present your container plans and IBM will determine if you qualify and at what cost.

Jones introduced the software discounts by reiterating that this was focused on software container pricing for IBM Z and promised that there will be a technology software benefit with z14 as there was with the IBM z13. “This is a beginning of a new beginning. Clearly, as we go forward, we want to expand what’s applicable to container pricing.”

IBM is intent on expanding the discounting it started two years ago when it introduced discounts for mobile transactions running on Z, which was driving up MLC averages as mobile transaction volume began to skyrocket. The new pricing eliminates what goes on in container from MLC consideration.  

The benefits are straightforward: simplified pricing for qualified solutions and flexibility to deploy in the best way. And IBM can price competitively to the organization’s solution since it’s all arranged in advance, leading to, in effect, solution-specific pricing. Of course, the appeal is predicated on the prices IBM publishes. Just hope they will be as competitive as Jones implies.

Alan Radding may be reached at