IBM Discloses DB2 Licensing Changes

Midrange customers to get price break, high-end customers will pay more.

• By Stephen Swoyer
• 09/19/2002

In addition to a bevy of new features and enhancements, DB2 8.1 will introduce a new pricing model that could ease costs for midrange customers and increase costs for high-end users.

Jeff Jones, director of strategy for IBM data management solutions, says that in DB2 8.1, Big Blue has reshuffled its DB2 product versions. For example, Jones explains, IBM is combining its former DB2 single user and personal editions into a new DB2 8.1 Personal Edition. IBM will also consolidate its high-end DB2 products, Enterprise Edition and Enterprise Extended Edition, into a new Enterprise Server Edition.

Pricing for DB2 8.1 Personal Edition should stay the same, as will pricing for the base-level Workgroup Edition, which IBM has re-christened "Workgroup Server Edition." As of DB2 8.1, however, IBM will offer customers unlimited user licenses for Workgroup Server Edition at $7,500 [per processor]—a price drop of almost 50 percent. Unlimited user licenses for Workgroup Edition currently cost $14,000 [per processor].

Mike Schiff, a senior analyst with research firm Current Analysis Inc., says that with its DB2 8.1-related price breaks, IBM is explicitly targeting Oracle Corp., the current market leader.

"IBM is being very aggressive with the pricing [of DB2 8.1] because it's trying to get market share at Oracle's expense. First, it bought Informix. Now, it's lowered prices on [the Workgroup Server Edition] of DB2," he says. "It senses that it can steal share away from Oracle in the mid-market, where [Oracle] is perceived as being the more expensive of the two databases."

Big Blue's price breaks for mid-range customers will be realized at the expense of its high-end customers, however. These shops commonly run DB2 on IBM's own AIX Unix platform, as well as on competing Unix releases from Hewlett-Packard Co. (HP-UX) and Sun Microsystems Inc. (Solaris). Prior to the consolidation of its high-end DB2 product lines, IBM offered non-clustered (Enterprise Edition) and clustered (Extended Enterprise Edition) versions of DB2, available at price points of $20,000 and $25,000 per processor, respectively.

As of DB2 8.1, IBM's Jones acknowledges, the base price of Enterprise Server Edition will be $25,000 per processor. A clustering option is available for an additional $7,500 per processor, bringing the total cost of DB2 8.1 Enterprise Server Edition with clustering to $32,500 per processor— an increase of 23 percent.

Jones says that the price increase is offset for high-end customers by DB2 8.1's new performance enhancements, which include a new multi-dimensional cluster facility that allows the database to group related data together across multiple dimensions to speed up queries.

"This isn't out of line for previous increases for us, [and] it reflects our belief of the value the upgrade," he asserts, arguing that Oracle Corp.'s Oracle 9i database is significantly more expensive than DB2.

For his part, Current Analysis' Schiff says that IBM's price increases should have a negligible effect on high-end DB2 customers. After all, he reasons, customers who deploy mission-critical databases on large Unix servers will more often than not go with the better database regardless of price.

"When you bet your business applications on these kinds of platforms, pricing is secondary," Schiff notes.

Other new DB2 enhancements include a materialized query feature that supports other, non-IBM database platforms, as well as a variety of XML- and Web services-related enhancements. Significantly, Jones says, IBM improved DB2's availability and uptime by making at least 50 of its operating parameters dynamically adjustable. "Now you don't have to stop [the database], make the change and restart for these to take effect," he says.

Finally, DB2 8.1 ships with a new Health Center component that aggregates a number of monitoring and alerting capabilities under one hood.

No New DB2 8.1 for zSeries, iSeries
IBM currently maintains three DB2 code-bases: One for z/Series, another for iSeries, and a third for so-called "open systems"—Unix, Windows and Linux.

Each platform-specific iteration of DB2, none of which shares the same version number, is marketed for a different purpose. IBM's DB2 variant for open systems, for example, will run on high-end Unix hardware such as an HP SuperDome server or on entry-level uni- or dual-processor Intel-based systems. As a result, says Mark Schainman, a senior research analyst with consultancy META Group, IBM's DB2 development groups have decidedly idiosyncratic delivery objectives and timetables.

"I know that they try to make a lot of the features similar between the three, but the truth is [that] the only parity you see is between some of the presentation layers," he comments. "It's hard to fully coordinate with three development efforts for different applications on different platforms."

IBM shipped DB2 version 5.2 for iSeries in tandem with its release of OS/400 version 5, release 2 (5R2) in Spring 2002. IBM's Jones acknowledges that the iSeries development team is "on a very steady path … to ship every spring," but stops short of indicating that a new version of DB2 for iSeries will appear in Spring 2003: "I don't know if they're going to change that. It's a function of the hardware and the operating system. DB2 is a part of the [operating system], so you can speculate that that will occur next year."

DB2 version 7 for zSeries shipped in March 2001. In contrast, DB2 7.2, the precursor to DB2 8.1, shipped in May 2001. With more than a year-and-a-half gone by, there's been no word from IBM about the availability of the next version of DB2 for zSeries.

Part of the reason for the delay, acknowledges IBM's Jones, is that the development cycle for DB2 on the mainframe is generally more drawn out than in the open systems space.

"The development cycle for zSeries DB2 is a bit longer than the 12 to 18 months on Unix, Windows and Linux, so what I'd expect is come later this year we'll start talking about a new DB2 for zSeries," Jones says.

Although Big Blue raised the price of DB2 on high-end open systems by almost 25 percent, Jones says that he’s not aware of any plans to change the manner in which DB2 is currently priced on zSeries.

"We do not publicly discuss pricing on the mainframe. We’re not aware of [a] plan to change the structure on the mainframe at this point," he concludes.