Back in April 2020, IBM very quietly announced some changes to its pricing structure. So quietly in fact, that almost no one seemed to notice, which is a surprise considering the significance of these changes. Here at Livingstone we have even reached out to a number of colleagues in our IBM ecosystem to see how aware they are of IBM’s plans. The answer is ‘not very’. This news seems to have flown completely under most people’s radar.
In short, IBM is effectively removing all RSVP price discounts on a huge range of products from July 1st. While the vendor’s announcement provides no reason for the withdrawal of these discounts, it might be a clue that it is trying to encourage customers towards other products, most probably, CloudPak as well as other subscription- and SaaS-based offerings. Right now, we have no insight into how IBM Sales will deal with these changes going forward. That all remains to be seen.
IBM’s behaviour seems to mirror the approach taken by Microsoft over the past few years; effectively making cloud products more attractive by increasing the price of buying software in any other way. We’ve also heard chatter about IBM slashing channel rates too, which is definitely a bit déjà vu.
Whatever IBM’s motivation, these price changes are going to have a massive impact on nearly every IBM customer come renewal time. I simply can’t see how any customer could have budgeted for these price increases or planned for early purchases. To fully understand the impact, we’ll have to see how IBM deals with renewals, but we expect a pretty big impact in the short term.
Following on from the recent HCL divestiture, some customers might even begin to question the value of sticking with IBM at all. Indeed, we are already gearing up to support our customers with IBM renegotiations and product alternatives. Some clients are even considering dropping IBM S&S altogether to either go unsupported or switch to Origina, where it makes sense.
We’d be interested in your thoughts on this. Were you aware of IBM’s plans? How will this impact your business and what sort of assistance will you need to help manage this huge change? You can drop us a line or find out more about our range of IBM services here.
ABOUT THE AUTHOR
Author: Niall Eddery – Senior Consultant, IBM Lead
Niall has worked in the IT industry for over 26 years and more specifically in Software Licensing for 16. His experience has taken him on both sides of the audit fence, having audited for KMPG and managed IT assets for EY and Macquarie Bank at a global level.
Niall has been a senior consultant at Livingstone for over 7 years, during which time has managed well over 100 audit projects. His expertise is around IT Asset Management, Software Asset Management & Licensing and he has been involved in contract compliance for software licensing, royalty, service level agreements and channel compliance in the UK, Australia, Europe and Asia Pacific.