The other factor, especially for smaller accounts, is capital expenditure vs operational expenditure. While it may cost more in the long run, for some customers it is much easier to get approval for cloud because it is classified as an operational expenditure instead of a capital expenditure.
Brian May
Director
Pre-Sales and Customer Solutions
Profound Logic Software
http://www.profoundlogic.com
937-439-7925 Phone
877-224-7768 Toll Free
UI Modernization. And More!
www.profoundlogic.com
-----Original Message-----
From: MIDRANGE-L <midrange-l-bounces@xxxxxxxxxxxxxxxxxx> On Behalf Of Steve Pitcher
Sent: Monday, May 4, 2020 3:08 PM
To: Midrange Systems Technical Discussion <midrange-l@xxxxxxxxxxxxxxxxxx>
Subject: RE: Move to the cloud (was HTTPAPA ciphers on 7.1)
Off the top of my head I can think of two of my really small cloud deals against tiny POWER9s including tape drives with three year HWMA/SWMA. Break-even was over six years in the cloud based on the workload. And that's not considering years 4-6 maintenance tacked on to the POWER9. Not bad.
To answer your question, would it do them and IBM a service to get them a new machine? Some yes, but not those two customers. They needed speedy migration and low-cost.
There's a lot of gray area and I think we can agree on that. ;)
Steve Pitcher
iTech Solutions Group, LLC
p: (203) 744-7854 Ext. 176 | m: (902) 301-0810
www.itechsol.com | www.iInTheCloud.com
-----Original Message-----
From: MIDRANGE-L [mailto:midrange-l-bounces@xxxxxxxxxxxxxxxxxx] On Behalf Of midrangel@xxxxxxxxxxxxxxxxx
Sent: Monday, May 4, 2020 4:44 PM
To: 'Midrange Systems Technical Discussion' <midrange-l@xxxxxxxxxxxxxxxxxx>
Subject: RE: Move to the cloud (was HTTPAPA ciphers on 7.1)
Steve:
There are exceptions to every statement, as you point out those are lost customers. But would it not be a service to them and IBM if they simply purchased a new system?
One example is a customer I have that is in the exact condition you specify,
P5 no maintenance. Small system. Configured P9 and got cloud based quotes.
In that case the break even for on premise was 32 months. They plan on at least 5 years on this system. Now why would they consider cloud vs.
purchase? When the math is done honestly, it rarely works out in the favor of the cloud if the horizon of the system is 36 months or more, except of course to the cloud provider......
I would argue that the customer brought back from the dead is a good one, but the whole "move to the cloud" thing is eventually going to bite back, just like client/server did. My only hope is I retire by then.
I won't comment further since it will become a never ending, not solving a thing discussion.
--
Jim Oberholtzer
Agile Technology Architects
-----Original Message-----
From: MIDRANGE-L <midrange-l-bounces@xxxxxxxxxxxxxxxxxx> On Behalf Of Steve Pitcher
Sent: Monday, May 4, 2020 2:19 PM
To: Midrange Systems Technical Discussion <midrange-l@xxxxxxxxxxxxxxxxxx>
Subject: RE: Move to the cloud (was HTTPAPA ciphers on 7.1)
Jim, many of the customers that I've personally moved to iInTheCloud are the smaller ones running V5Rx with no maintenance agreement for HW/SW. They have no relationship with IBM and haven't in 15 years. Some even longer. So...I'd argue IBM isn't losing much of that type of business...because they've already lost it. They can't lose it again.
In fact, I'd argue that IBM is gaining that business back (albeit
indirectly) by hosts needing to purchase more resources to accommodate those small shops. Would IBM like to sell them a new little machine? Sure they would. So would I. The cost difference between both options, which are of course different for every workload and every cloud vendor, will dictate their choice.
Steve Pitcher
iTech Solutions Group, LLC
p: (203) 744-7854 Ext. 176 | m: (902) 301-0810
www.itechsol.com | www.iInTheCloud.com
-----Original Message-----
From: MIDRANGE-L [mailto:midrange-l-bounces@xxxxxxxxxxxxxxxxxx] On Behalf Of midrangel@xxxxxxxxxxxxxxxxx
Sent: Monday, May 4, 2020 12:36 PM
To: 'Midrange Systems Technical Discussion' <midrange-l@xxxxxxxxxxxxxxxxxx>
Subject: RE: Move to the cloud (was HTTPAPA ciphers on 7.1)
Your price may be going down, but that's not the trend with POWER based cloud providers......
A customer on your cloud system is no longer a customer to IBM, but rather to you. You are IBMs customer. For every customer you sign up, IBM looses one.
--
Jim Oberholtzer
Agile Technology Architects
-----Original Message-----
From: MIDRANGE-L <midrange-l-bounces@xxxxxxxxxxxxxxxxxx> On Behalf Of DrFranken
Sent: Monday, May 4, 2020 10:23 AM
To: Midrange Systems Technical Discussion <midrange-l@xxxxxxxxxxxxxxxxxx>
Subject: Re: Move to the cloud (was HTTPAPA ciphers on 7.1)
Certainly cloud isn't right for all customers. I drive a Prius, great car, perfect for me now maybe not forever and certainly not right for everyone.
As to IBM losing business, bummer. But are they? Every customer that stays on the platform because they can move to the cloud is still a customer. They may still be paying other vendors in the space for licensing and maintenance. They DO cause me to acquire more licensing for my servers, we just keep ordering more. Sure I get more than one customer per IBM i License that's part of the reason it makes sense but if that customer dumps the thing instead, IBM gets nothing inperpetuity.
The software companies get nothing. The ecosystem shrinks.
I am puzzled where the cost increases come from, as our pricing just keeps going down!
- Larry "DrFranken" Bolhuis
www.Frankeni.com
www.iDevCloud.com - Personal Development IBM i timeshare service.
www.iInTheCloud.com - Commercial IBM i Cloud Hosting.
On 5/4/2020 11:01 AM, midrangel@xxxxxxxxxxxxxxxxx wrote:
<snip>
Move to the cloud... Moooooove to the Cloud!!
<vendor response>
</snip>
While you're at it cut the number IBM i licenses IBM sells, the POWER
systems it sells, the maintenance contracts it sells by what 50% or more?
A
cloud provider does not pay for each individual copy of IBM i they
host,
nor
do they buy nearly as much hardware. If they did the cost factor
would be very unfavorable and on premise would be a simple sell. Then
there are
the
maintenance fees IBM does not get since the hardware/SWMA is on one or
two systems, as opposed to 20 or 30. The increased P level on the
cloud
systems
does not make that up.
How is IBM i or for that matter IBM supposed to survive with only a
small number of customers, cloud vendors, buying the product?
COMMON, PowerUP! Expo is slowly (and maybe not slowly) contracting,
mainly due to the consolidation of OEM vendors. When these vendors
only sell to the cloud vendors what happens then?
The move to off site hosting, "cloud", and SaaS will only exacerbate
that problem for both IBM and COMMON.
What happens to cloud pricing (already starting to go up) when a local
option no longer exists? In our customer set +90% of them see savings
for on cloud vs. on premise for 32 - 36 months. After that, including
maintenance, it's more costly on the cloud, sometimes significantly.
The cost to come off the cloud is the dirty little secret the cloud
vendors
tend to hide. What are the off load fees? Check your
AWS/HP/Google/cloud backup contracts. Bet you'll find the offload
fess
and they aren't'
cheap.
How much does your cloud provider charge to off load you from the
POWER equipment, it's not free since they have to back up to physical
media and ship it, then there are the data transfer fees that get wild
when lots of data go over the line.
There are several other arguments to make but that's the gist of it.
Remember Client/Server was going to save the world from the glass
house monolithic systems? We did that, discovered it was more
expensive and harder to maintain, and reversed course. Now we are
tacking right back
into
the wind with "Cloud" again. (client/server all over again in a
slightly different configuration)
I know your advising a V7R1/P5 customer but the "cloud" is not the
correct answer in most cases. Yes, they need to upgrade and the
ciphers are about to force their hand. I know you disagree, but we
can agree, there is room for disagreement.
--
Jim Oberholtzer
Agile Technology Architects
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