IBM's major iSeries announcement on January 20 included the news that its Software Maintenance program, which provides combined technical support and software upgrade entitlement, will be available for the entire iSeries group of products beginning January 28.
The announcement also included the news that customers with current Software Subscription and Support Line contracts will no longer have the option to renew their contracts if they expire after July 31, 2003. In other words, if customers' Software Subscription or Support Line contract expires before July 31, they can renew these programs, but after that date, they will be required to sign up for Software Maintenance. In addition, it is important to note that the option to purchase Support Line services on an hourly basis will be discontinued as of July 31.
"The purpose of the change is 1) to simplify, and 2) to make the delivery of support consistent worldwide," says Nancy Lowe, Program Manager, iSeries Worldwide Marketing. "We have been working for some time towards a model of providing simpler and consistent terms across IBM software worldwide. That is the primary goal here." Lowe continues, "This announcement is a step in our goal. We are not 100% where we want to be, but this is getting us one step closer."
IBM's Software Maintenance program, which includes both technical support and upgrade entitlement, was originally announced in July 2001 for a limited set of software products. IBM's statement of direction at the time indicated that Software Maintenance would eventually become the sole support and upgrade entitlement option for the entire iSeries grouped offering--essentially, the same group of products that were covered under Software Subscription. The current announcement should therefore come as no surprise to those following the interim announcements that have added products to the Software Maintenance umbrella.
When any new iSeries server is purchased after January 28, Software Maintenance will be included with all software shipped for the machine. In fact, Software Maintenance will be a required feature, and the customer will be charged for this feature. The only exception is if a customer is purchasing the Enterprise Edition of an iSeries server, in which case Software Maintenance is included for one year at no extra charge. When a customer purchases an iSeries Standard Edition server or additional software within the iSeries grouped offering, the customer must decide at that time whether to pay for Software Maintenance in a one-year or a three-year increment. The same applies when the year of included Software Maintenance expires under the Enterprise Edition.
"The cost of Software Maintenance will be between 2% and 7% of the purchase price," Lowe says. "This depends of course on the size of the system being purchased. The cost of Software Maintenance for the average shop will be the same or close to the current costs for both Software Subscription and Support Line." According to Lowe, pricing will be simplified with Software Maintenance as well. Up until now, Support Line had 20 pricing levels and Support Line had seven. Software Maintenance will have only seven pricing levels, all based on the processor levels announced on January 20.
Customers who have been following the evolution of the Software Maintenance program since its inception in July 2001 may have realized the bottom line of this program: If you don't already pay IBM for your technical support, you soon will, and the January 20th announcement essentially lets you know when. Many organizations that have opted out of a Support Line contract and have perhaps paid for ongoing software support elsewhere, will soon be paying IBM for this service whether they want it or not. It also means other entities that have provided support will likely be losing a line of revenue. According to Lowe, 85% to 90% of shops in the United States have a contract in place for Software Subscription, but only 25% currently opt in on Support Line (higher in Canada and Europe), although she indicated that another 25% to 35% pay for hourly support when they need it. When asked about the extra cost to customers who don't currently pay for a Support Line contract, Lowe says, "There are two important points: 1) The support component of Software Maintenance is, for example, at the PO5 level, priced at a point that equates to about the cost of two hourly calls, and 2) an added advantage is that hourly customers are frequently surprised on the high side of an unplanned hourly bill that far exceeds the cost of what an annual annuity contract costs."
Lowe goes on to emphasize the benefits of IBM iSeries support to customers, especially in the context of IBM's direction of moving toward "on-demand computing" where features and software can ultimately be turned on and off when needed. "In keeping with preparing our customers for the on-demand era, there is no question that they need access to the technical support organization that is best equipped to handle OS/400 questions and issues," Lowe says. "There's no better support team in the world than IBM Rochester iSeries support. We're clearly the best in the business....you have contact with the best technical people who are linked directly to our lab. You have unlimited call capability, you can get help with problem determination, you don't have to wait until you've got an emergency, you can get it resolved now."
Customers should note that if they wish to move to Software Maintenance before their Software Subscription and/or Support Line contract expires, they can receive a 10% to 70% credit on Software Maintenance, depending on how much time remains on their existing contract.
So, what does the future hold for the support and software upgrade entitlement programs for the iSeries? "Our customers would like to see a variety of things--for example, auto-renew capabilities and automatic customer notification capabilities," Lowe says. "We have several projects under way to make it easier for our customers and easier for our partners."