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Research and publishing services for the enterprise data centre community |
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Arcati Limited |
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Barry Graham is an internationally recognized authority on the mainframe marketplace from both a financial and technical standpoint. He worked for many years in senior management positions with IBM and Hitachi Data Systems. At IBM he was UK Large Systems Marketing Manager for MVS Systems and 30xx hardware. He left IBM to become Director of Strategic Account Marketing for HDS Europe. He has also held senior positions in the software and leasing sectors. Now an independent consultant, Barry has played a key role in the establishment and on-going operation of Arcati’s Mainframe Market Information Service, managing long-term contracts with users worldwide to help them negotiate directly with IBM and the ISVs. To date every one of these has resulted in substantial savings for the user. |
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Barry Graham Principal, Smart Computing |
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Model ISV Software Contract
Participants at this briefing will receive a copy of a model software contract developed by Barry Graham, plus detailed notes on how to use it in vendor negotiations. The contract alone has saved organizations many millions of euros! |
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23 June 2008 (9:30—16:30)
London Heathrow
Attendance fee: 750 pounds plus VAT
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Key questions answered
· What are the implications of the Workload License Charge (WLC)? · How does an IBM ESSO/ELA contract work and what is a realistic target price? · Why is IBM increasing the duration of contracts and introducing OTC products with maintenance? Why are ISVs going the other way? · How can a user tell whether a contract is good or bad in literally an hour? · How can you negotiate with IBM and independent software vendors? · How can users calculate future software costs? · How can large, unscheduled upgrade costs be eliminated? What savings are possible? · What is the market price for mainframe processor purchase and maintenance today and how can a user achieve these prices? · What is the market price for mainframe processor purchase and maintenance today and how can a user achieve these prices? · What is IBM's current System z hardware pricing strategy? · Why is purchasing System z hardware 30% cheaper than leasing?
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Barry Graham’s annual masterclass, fully updated to include z10 pricing. Sessions include:
* Putting software costs in context * New pricing models and future costs * Minimizing software costs in the future * Negotiating and IBM ESSO or ELA contract * Hardware pricing update |
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Negotiating mainframe software and hardware contracts
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For nearly 40 years IBM has introduced improved software pricing in the mainframe world on an almost annual basis – at an average rate of around 15% per year. This has been achieved through a combination of new pricing methodologies, lower prices for higher capacities, and aggregation of systems.
These improvements automatically benefited the users, with no special actions required.
However, recently IBM has chosen to provide this pricing improvement through negotiation rather than automatically to all users. Thus users who do not negotiate (or at least do not negotiate well) pay far more for their software than their peers. The level of ‘negotiable’ discount increases year by year to compensate for the 15% per annum improvement that is no longer automatically provided.
Consequently discounts of as much as 80% for additional monthly licence charge software and 90 to 95% for OTC software are possible in well negotiated contracts. In the former case it is just a question of ‘phasing’ the monthly licence charge stream to maximise the benefits. In the latter case it comes down to using the right negotiating tactics.
This seminar enables users to maximise their discounts and re-gain the initiative, ensuring that they get the full price improvements that would otherwise be taken away.
Who can benefit from this seminar?
Often users read about the software savings suggested by this seminar and assume that it will not be of any use to them. Some think they are too big and have such good deals that it is impossible to get any better terms. Others think that they are too small to be able to negotiate special deals.
“In fact,” says Barry Graham, “I have worked with users as small as 600-800 MIPS and as large as 100,000 MIPS and NEVER failed to get much improved terms using the ideas and information presented at this event.”
How big can the savings be? Well, for IBM software none have been under 10% and many have been in excess of 25% of the total spend. In terms of the percentage of additional costs for new products and projects, the savings can exceed 80%! For the ISVs similar savings are possible.
NOTHING can prevent you from making these savings – even if you have an existing contract – as long as you are prepared to negotiate.
For hardware, particularly System z processors, the potential is just as high and again reductions in price are attainable by all sizes of users. With IBM itself confused on pricing ONLY the best and most up-to-date information can get you the lowest prices. (Evidence of this confusion can be seen from the fact that in one version of an IBM worldwide presentation IBM quoted the price of a z10 processor upgrade as $1m, yet in many user situations the price quoted for an identical upgrade has exceeded $2m. That is a price variation of over 100% using published material.) But it can be worse: we have seen variations of up to 200% from deal to deal and all sorts of confusion about ‘clothed’ and ‘raw’ MIPS and the infamous 'warranty recapture'. All will be explained in this seminar.
Every user – of every size – WILL pay less for mainframe software and hardware after attending this seminar.
“Barry’s leadership, guidance and assistance have proved invaluable.”
A US customer with between 600 and 800 mainframe MIPS who recently negotiated a 30% saving on IBM’s original offer for both hardware and software.
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In a nutshell this seminar will enable you to grow your mainframe capacity at 20-25% per year with no increase in cost! |