This session looks at how software pricing has evolved and explains why the evolution has followed the path it did. The different costs at different capacity levels will be reviewed to understand the issues facing IBM in particular, as it changes the pricing model.

  • The history of software pricing
  • The different costs for small and large users
  • New opportunities to reduce costs for small to medium users
  • What is the budget split between hardware and software?
  • What is the budget split between IBM and ISVs?
  • What are the pressures on vendors to change their pricing structure?
  • Why do software costs apparently reduce but the bills increase?
  • How do software costs relate to the business?
  • What will happen to software costs in the future if nothing changes?
  • What is IBM's software pricing strategy?

The new licensing models from IBM and the ISVs will be explored and attendees will learn how to project their future software costs - an essential element of negotiating an ELA software contract with IBM. Attendees will also gain an understanding of the thinking behind IBM's price changes in particular, to help protect themselves from the hidden agenda behind them.

  • Workload Licence Charging (WLC) explained
  • FWLC and VWLC - is this something new?
  • How does WLC compare with Parallel Sysplex Licence Charging?
  • Where are the specific benefits of WLC pricing?
  • Software cost differences around the world
  • The ISV response to WLC
  • Calculating future software costs
  • How did IBM arrive at the WLC model and how will it affect its revenues?
  • All vendors say they are trying to charge according to the value of their products to your business, but how do you put a value on software?

This session explains how to negotiate with IBM and the ISVs, and proposes new types of software contracts for the future.

  • Why cutting software costs is extremely difficult and possibly not the best long-term solution (compared with stopping or controlling the growth of software costs in the future)
  • Ideas for controlling software costs in the future - with examples
  • How to negotiate with the ISVs
  • Licence fees and maintenance - how to avoid budget issues
  • Win/win negotiations explained - initial proposal £3 million, final contract £250,000: who's kidding who?
  • Controlling the software cost explosion
  • Why not relate software costs to the business rather than capacity?
  • The returns on a software control policy are long-term - so why should a manager with short-term objectives focus on this area?

This session shows attendees how to break down the IBM 'bottom line' contract and understand the cost of each element. It also shows how buying an OTC software product that is not top of the user's list of requirements, but critical to IBM, can dramatically reduce the cost of all other products.

  • The ESSO/ELA contract explained
  • The OIO explained
  • How to negotiate an ELA/ESSO with IBM
  • The relationship between MIPS, MSUs and Value Units explained - essential to understanding any IBM Mainframe OTC pricing
  • How to grow your capacity at 25% per year for no increase in cost

Based upon the Arcati Mainframe Market Information Service, this session offers an update on current processor market prices and illustrates how to reduce the cost of any purchase and maintenance deal. With the actual price range paid by different users demonstrating a differential of over 100%, this session is invaluable for attendees.

  • What is the current price for mainframe processors?
  • What is a reasonable maintenance cost for a mainframe processor?
  • How to negotiate hardware prices
  • How does IBM charge for System z processors?
  • Upgrades compared with new systems
  • Maintenance pricing trends and 'warranty recapture'
  • How leasing System z can damage your wealth
  • Should I buy a z10 and will it reduce my costs?

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