IBM price increases coming in 2023

IBM

IBM price increases coming in 2023

Happy New Year from IBM: Here are your new prices

More software “price harmonisation” coming from a Tier 1 vendor… following on from Microsoft’s recent announcement, IBM is increasing its pricing by as much as 24% from January 2023!

There will be a 19% increase for the Canadian dollar while there will be a 24% increase for:

• GBP
• Euro
• Danish Krone
• Norwegian Krone
• Swedish Krona
• Japanese Yen
• South African Rand

IBM has stated that impacted products include:

“All Passport Advantage Eligible Perpetual, Subscription License, Monthly License, Fixed Term Licenses, Appliances, and SaaS Products”

Which doesn’t seem to leave many parts of the portfolio unaffected!

*Update* As spotted by Niall Eddery, IBM have amended the announcement slightly to give further clarity around SaaS pricing:

“All Passport Advantage Eligible SaaS Products will see the following adjustments:

• 5% decrease where IBM transacts in the Swiss Franc
• 7% increase where IBM transacts in the Indian Rupee, and South Korean Won
• 10% increase where IBM transacts in the Canadian dollar
• 15% increase where IBM transacts in the following currencies: British Pound, Euro, Danish Krone, Japanese Yen, Norwegian Krone, South African Rand, Swedish Krona

Note: IBM Cloud products are not included.”

Next steps

IBM price increases of this size are very rare and this is a great opportunity for you to re-consider your approach to IBM licensing. If you’re already looking to downsize, accelerate and if you’re not…start exploring your options. Talk to your senior management and the stakeholders who use IBM to a) warn them that this is coming as it will certainly affect budgets and b) to see whether you can start to move away from IBM in some areas.

If you have planned IBM purchases in 2023 that need to happen, take a look at whether you can bring them forward into 2022 to beat the price increase. This will have a positive impact on IBM’s year end results which may be part of their plan.

Furthermore, take a look at 3^rd-party support options such as Origina to see how they can help you reduce your IBM spend to mitigate (at least partially) this upcoming price increase.

Commentary from Tomás O’Leary, Origina

Tomás O’Leary, CEO and founder of Origina, had a few comments:

“These hefty IBM price increases just exacerbate the big budget problem facing so many companies using IBM software, where on average it’s already taking 90% of IT budgets to keep the lights on. A 24% price increase on much of the IBM portfolio means companies end up spending even more of their budget with IBM and not realizing any additional services or benefit for the money.

Smart companies today are making strategic choices that allow them to “Save to Invest,” and such cost increases go directly against that paradigm. Companies are looking at their environments, identifying areas to make significant savings without degrading service — they are, in fact, improving service — and are actively removing unnecessary costs to make investments in critical, digital initiatives that deliver on innovation for their business operations and the benefit of their customers.

Today, service is more important than ever, particularly customized support. One has to wonder what companies will be getting for these higher prices? What is the real ROI on this investment? Will customer service increase?

Software support should be a help, not a headache, and these price increases are surely going to add stress to the already struggling bottom lines of many organizations. In this economy, customers need to do more with less. Instead of doing what’s always been done, IT leaders must seek out more innovative approaches and take control of their IT roadmaps.”

Background reading

You can read the official IBM announcement here – https://www.ibm.com/common/ssi/ShowDoc.wss?docURL=/common/ssi/rep_ca/n/323-531WWEN/index.html

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