BCC Lowers Memory Costs

Competition may keep CEOs up at night, but it’s generally healthy for their customers. The emergence of BCC Technologies Inc. as a viable alternative supplier of AS/400 memory modules, for example, has kept IBM on its toes.

Though "it took BCC years to get into this market as a competitor with IBM," the company now offers "a full turnkey memory module" for the AS/400, according to David Breisacher, CEO and chairman of BCC Technologies (Irvine, Calif.).

"Memory had not been a very attractive market for OEM manufacturers," Breisacher says. But memory capacity is more important now than it was even a few years ago, thanks largely to the increased capacity of RISC-based AS/400s.

The AS/400’s increased high-end capacity has heightened the demand for memory, as has the server line’s popularity as a data storage device. Memory can represent more then 50 percent of the cost of a single CPU, according to Breisacher. "BCC has been successful with customers buying base models and upgrading with BCC memory modules," he says. "Saving money on memory benefits both the customer and IBM by freeing the customer to purchase larger processors."

BCC designed its memory upgrades to have their own logic and design, apart from IBM’s proprietary expansion memory. Such an initiative was two years in the making and "took a lot of commitment," Breisacher says.

Over the past eight months, both IBM and BCC have dropped prices for memory modules. At this point, Breisacher estimates BCC is still about 20 percent below IBM’s pricing.

Since June, IBM has cut pricing on its first-generation RISC memory by 50 percent. IBM-brand memory cards for models 500, 510 and 50S were cut to $21 per MB, while cards for 530 systems and 53S servers sold for $38 per MB.

For its part, BCC has already released its own memory cards for system models 400, 600 and 620, as well as 150, 40S, S10 and S20 servers for a reported 36 percent less than IBM’s charge of $21 to $29 per MB.