iSeries Upgrades: The Time Was Never Better

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When IBM introduces a new iSeries model, the prices of older models in the used equipment market will always be negatively impacted. This appears to be precisely what is happening now as IBM ships its new 8xx models and the new 270s. These events--combined with a sluggish IT economy--are creating some great deals for low-end and high-end iSeries machines.

ITParade.com, Inc., a North Carolina clearinghouse for used IT equipment, has been tracking the retail prices of used AS/400s and iSeries computers and disk drives on an ongoing basis. Last week, it released the latest price index for July 2002. This core sample of the iSeries after-market shows a significant drop (18% over 2 months) in the value of some used high-end models iSeries computers. Likewise, there was a substantial drop (8% over 2 months) in low-end models.

On the high-end, the average value in the marketplace for a used iSeries Model 730 was $121,565.00 last May, but by mid-July that value had plummeted to $100,111. This sudden slump is clearly a result of IBM's delivering its newest 8xx high-end servers this summer.

Similarly, as IBM began shipping the Model 270s, the price of a used Model 170 dropped from an average of $11,189.00 in May to $10,300.00 in July, a discount of 8%.

Used iSeries Prices: Average May-July, 2002*

iSeries Models
May '02
June '02
July '02
3-Month
Change

Used Price
Used Price
Used Price

170
$11,189
$10,967
$10,300
-8%
300
$1,467
$1,467
$1,467
0%
310
$1,300
$1,300
$1,300
0%
320
$1,800
$1,800
$1,800
0%
400
$1,688
$1,688
$1,688
0%
500
$1,300
$1,300
$1,300
0%
510
$2,100
$2,100
$2,000
-5%
530
$9,250
$9,250
$7,960
-14%
600
$7,350
$7,350
$6,925
-6%
620
$4,983
$4,983
$4,283
-14%
640
$19,500
$19,500
$18,333
-6%
720
$48,150
$43,483
$41,592
-14%
730
$121,556
$103,111
$100,111
-18%
9406
$5,950
$5,950
$5,950
0%
Average
$16,970
$15,303
$14,643
-14%

* Source ITParade.com The figures we've used to calculate these changes in value are based upon average iSeries prices and quotes, and do not reflect any particular features or operating system versions that may have been installed on individual machines. A complete list of ITParade.com's current index is at the end of this article.

Yet, in the middle of the iSeries model range, there are several models that saw no depreciation in value at all over the three-month period. This stability in the used equipment marketplace possibly indicates that there is no lack of demand for these popular models: They represent the heart of the current iSeries marketplace.

Bad Times Make Good Deals

What other reasons might there be for such great deals? "It's the economy, stupid!"

The dramatic decline of dot.coms and the general economic distress in the telecommunications industry have put tremendous downward pressure on the value of used computing equipment, and iSeries machines are no exception. Struggling companies have found themselves throwing used, and sometimes practically new, IT equipment onto the used equipment market. In the captive iSeries market, this trend, in turn, has put the pressure on IBM to push out newer models with higher value to try to build momentum for new sales. So, with the general economy still struggling toward recovery, IBM's efforts will continue to be toward shoring up the iSeries marketplace. It will focus its efforts on bringing out newer features faster; pressing for sales on its newest, hottest models; and letting the rest of the used iSeries models seek their own level of value in the aftermarket.

The result is that today it's a buyer's market for pre-owned iSeries 400s. There are some excellent opportunities for corporate value hunters to upgrade their systems at a discount.

Of course, buying used equipment does have additional considerations over buying new, and by far the most popular concern is the warranty coverage. However, IBM has been traditionally very savvy about picking up service contracts for pre-owned machines, and often the money saved in a used piece of equipment will afford the customer a premium maintenance option from the manufacturer.

Making a Switch

Meanwhile, if your company is considering upgrading to a larger machine--or if you're seeking a required option for an existing machine--now is the time to tune up your budget and take a look at the used equipment marketplace. With the IT industry in a slump, you can be certain to find great deals that may just be too tantalizing for your CFO to pass up.

At the same time, if your company won't consider buying a used iSeries, the current environment probably won't hurt you either. It offers a significant bargaining chip with your iSeries sales representative to make certain your company gets the best deal possible on a new piece of equipment.

Range of iSeries Model Prices: May-July 2002*

CPUs
May '02
June '02
July '02
3-Month
Change

Used Price
Used Price
Used Price

170-2159 V4R4
$3,200
$3,200
$3,200
0%
170-2164 V4R2
$3,500
$3,500
$3,500
0%
170-2289 V4Rx
$4,500
$4,500
$3,500
-22%
170-2290 V4R5
$5,100
$5,100
$3,900
-24%
170-2291 V4R5
$5,500
$5,500
$5,200
-5%
170-2292 V4R5
$8,900
$8,900
$7,500
-16%
170-2385 V4R5
$17,500
$15,500
$13,900
-21%
170-2386 V4Rx
$20,500
$20,500
$20,500
0%
170-2388 V4Rx
$32,000
$32,000
$31,500
-2%
400-2130-w/4.x
$900
$900
$900
0%
400-2131-w/4x
$1,200
$1,200
$1,200
0%
400-2132-w/4.x
$1,750
$1,750
$1,750
0%
400-2133-w/4.x
$2,900
$2,900
$2,900
0%
9406-F80
$2,700
$2,700
$2,700
0%
9406-F90
$9,200
$9,200
$9,200
0%
300-2040/5142
$1,200
$1,200
$1,200
0%
300-2041/5142
$1,400
$1,400
$1,400
0%
300-2042/5142
$1,800
$1,800
$1,800
0%
310-2043
$1,200
$1,200
$1,200
0%
310-2044
$1,400
$1,400
$1,400
0%
320-2050
$1,200
$1,200
$1,200
0%
320-2051
$1,500
$1,500
$1,500
0%
320-2052
$2,700
$2,700
$2,700
0%
500-2140
$1,200
$1,200
$1,200
0%
500-2141
$1,500
$1,500
$1,500
0%
500-2142
$1,200
$1,200
$1,200
0%
510-2143
$1,700
$1,700
$1,700
0%
510-2144
$2,500
$2,500
$2,300
-8%
530-2150
$5,900
$5,900
$5,700
-3%
530-2151
$7,500
$7,500
$6,500
-13%
530-2152-w/4.x
$8,750
$8,750
$8,500
-3%
530-2153-w/4.x
$11,900
$11,900
$11,900
0%
530-2162-w/4.x
$12,200
$12,200
$7,200
-41%
600-2129-w/4.x
$2,400
$2,400
$2,000
-17%
600-2134-w/4.x
$2,900
$2,900
$1,900
-34%
600-2135-w/4.x
$4,900
$4,900
$4,900
0%
600-2136-w/4.x
$19,200
$19,200
$18,900
-2%
620-2175 w/4.x
$3,700
$3,700
$2,900
-22%
620-2179 w/4.2
$3,750
$3,750
$2,750
-27%
620-2181 w/4.x
$7,500
$7,500
$7,200
-4%
640-2237 w/4.3
$3,500
$3,500
$3,000
-14%
640-2238-w/4x
$9,500
$9,500
$8,500
-11%
640-2239-w/4x
$45,500
$45,500
$43,500
-4%
720-2061/1500 w/4.x
$9,900
$7,900
$7,700
-22%
720-2061/1501 w/4.x
$16,900
$10,900
$10,900
-36%
720-2061/1502 w/V5
$27,500
$27,500
$23,500
-15%
720-2062/1501 w/4.x
$21,500
$21,500
$20,500
-5%
720-2062/1502 w/4.x
$42,500
$37,500
$34,500
-19%
720-2062/1503-w/4x
$62,500
$59,500
$55,500
-11%
720-2963/1502 V5
$55,500
$42,500
$40,500
-27%
720-2063/1503 V5
$69,500
$67,500
$65,500
-6%
720-2963/1504 4.x
$115,500
$105,500
$104,500
-10%
720-2065/1506 4.x
$18,500
$18,500
$18,000
-3%
720-2065/1507 4.x
$65,500
$63,500
$62,500
-5%
720-2065/1508 4.x
$72,500
$59,500
$55,500
-23%
730-2065/1509-w/4x
$115,000
$99,000
$79,000
-31%
730-2066/1507 V5
$69,000
$49,000
$46,000
-33%
730-2066/1508 4.x
$79,000
$69,000
$72,000
-9%
730-2066/1509
$140,000
$99,000
$99,000
-29%
730-2066/1510-w/4x
$175,000
$150,000
$145,000
-17%
730-2067/1506 4.x
$66,000
$65,000
$63,000
-5%
730-2067/1508 4.5
$99,000
$83,000
$83,000
-16%
730-2067/1509 4.x
$152,000
$115,000
$115,000
-24%
730-2067/1510 4.x
$199,000
$199,000
$199,000
0%

* Source ITParade.com

Feature Codes for 940X: May-July, 2002*

IBM 940x Features
May '02
June '02
July '02
3-Month Change

Used Price
Used Price
Used Price

2609
$100
$100
$100
0%
2610
$550
$550
$550
0%
2611
$400
$400
$400
0%
2612
$100
$100
$100
0%
2613
$250
$250
$200
-20%
2614
$450
$450
$450
0%
2617
$275
$275
$200
-27%
2619
$100
$100
$100
0%
2620
$1,475
$1,475
$1,475
0%
2621
$100
$100
$100
0%
2623
$100
$100
$100
0%
2624
$300
$300
$250
-17%
2625
$100
$100
$100
0%
2626
$100
$100
$100
0%
2629
$400
$400
$400
0%
2644
$300
$300
$300
0%
2666
$550
$550
$550
0%
2668
$675
$675
$675
0%
2674
$250
$250
$250
0%
2686
$250
$250
$200
-20%
2688
$900
$900
$700
-22%
2720
$300
$300
$300
0%
2721
$150
$150
$150
0%
2722
$300
$300
$300
0%
2729
$550
$550
$450
-18%
2801
$100
$100
$100
0%
3172
$150
$150
$100
-33%
3182
$150
$150
$100
-33%
3187
$1,450
$1,450
$950
-34%
3191
$1,150
$1,150
$600
-48%
3192
$1,800
$1,800
$1,300
-28%
4317
$1,100
$1,100
$950
-14%
4318
$1,500
$1,500
$1,400
-7%
5051
$100
$100
$100
0%
5052
$300
$300
$250
-17%
5073
$2,200
$2,200
$1,200
-45%
5080
$1,400
$1,400
$1,100
-21%
5082
$1,400
$1,400
$1,200
-14%
5135
$150
$150
$150
0%
5143
$100
$100
$100
0%
6380
$100
$100
$100
0%
6390
$300
$300
$300
0%
6501
$200
$200
$150
-25%
6502/22
$250
$250
$150
-40%
6512
$250
$250
$150
-40%
6513
$350
$350
$300
-14%
6607 (9402)
$100
$100
$150
50%
6713
$450
$450
$300
-33%
6813
$500
$500
$350
-30%
7117
$400
$400
$400
0%

Disk Drives: May-July, 2002*

IBM Drives
May '02
June '02
July '02
3 Month Change
Used Price
Used Price
Used Price

3570-B01
$2,400
$2,400
$2,200
-8%
3590-B11
$9,900
$9,900
$8,500
-14%
9337-220 Full
$400
$400
$400
0%
9337-225 Full
$400
$400
$400
0%
9337-240 Full
$600
$600
$600
0%
9337-440 Full
$1,000
$1,000
$1,000
0%
9337-480 Full
$2,000
$2,000
$2,000
0%
9337-540 Full
$2,000
$2,000
$2,000
0%
9337-580 Full
$3,000
$3,000
$3,000
0%
9337-1212
$50
$50
$50
0%
9337-1220
$150
$150
$150
0%
9337-1288
$400
$400
$400
0%

* Source ITParade.com

Thomas M. Stockwell is the Editor in Chief of MC Press, LLC. He has written extensively about program development, project management, IT management, and IT consulting and has been a frequent contributor to many midrange periodicals. He has authored numerous white papers for iSeries solutions providers. His most recent consulting assignments have been as a Senior Industry Analyst working with IBM on the iSeries, on the mid-market, and specifically on WebSphere brand positioning. He welcomes your comments about this or other articles and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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