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Tailored Fit Pricing for IBM Z Unlocks the Full Power of the Platform

The new pricing model delivers the simplicity, transparency and flexibility of consumption-based pricing, with economies of scale for workloads on z/OS.

Piggy bank with a tape measure tightened around its belly.

IT leaders face unique challenges in their hybrid and multicloud environments. They must respond to dynamic business demands, and efficiently manage an ecosystem across vendors and infrastructures. 

Not only do they have to respond quickly to these demands, but they must also optimize operations on increasingly complicated multiplatform, multicloud environments—all while simultaneously managing resources and budgets. 

IBM recently announced new pricing and capabilities for IBM Z*, further positioning it as a center point of a secured hybrid cloud strategy. The change empowers IBM clients, giving them more confidence, flexibility and agility when it comes to building and running their environments. 

Cloud-Like Pricing

In the era of hybrid and multicloud, everything is connected and workload patterns are constantly changing. Managing demand for IT services can be a major challenge. When it comes to pricing, flexibility and management are essential. As more clients shift to an enterprise IT model that incorporates on-premises, private cloud and public cloud, IBM developed a simple cloud pricing model to drive the transformation.

In May, IBM introduced Tailored Fit Pricing for IBM Z, a revolutionary pricing model for today’s enterprise IT environment. It’s designed to deliver the simplicity, transparency and flexibility of consumption-based pricing, with economies of scale for workloads on IBM z/OS*. The hallmark of this model is that costs are tied directly to usage, removing the need for complex and restrictive capping. This model also includes aggressive pricing for workload growth. Tailored Fit Pricing is designed to both unlock the full power of the platform and ensure optimal response times and service-level agreements, 24-7.

Tailored Fit Pricing has two options:

  1. The Enterprise Capacity Model. This model is for businesses that require cost predictability and are strategically growing their IBM Z environment. Pricing runs at a consistent monthly rate, and the full capacity of the platform is available at all times. The capacity solution enables clients to mix and match workloads to help maximize use of the platform. This model is particularly helpful for those who have multiple large mainframe environments interconnected to work as one system, and also for those with complex environments in which workloads are moved around without incurring additional software costs.
  2. The Enterprise Consumption Model. For businesses looking for a more cloud-like pricing structure, this licensing model offers price predictability and transparency. Pricing is set using a simple baseline process, where growth of any kind is charged per the MSUs consumed at a greatly improved price point over the baseline. This solution is typically coupled with a low-cost, high-capacity development environment based on the Tailored Fit Application Development and Test solution.

The new pricing model wouldn’t be as successful without the support of ISVs. The pricing change was popular within the ISV ecosystem. Broadcom, an IBM ecosystem partner, announced the availability of a consumption-based pricing model to support mainframe workloads. It’s intended to complement and work seamlessly with IBM’s MSU-based pricing strategy. BMC and Compuware also offer their own open, flexible pricing models intended to provide a more seamless customer experience.

Similarly, businesses are already enjoying the benefits. Terry Glover, director of infrastructure at American retail chain Dillard’s, notes that “with Tailored Fit Pricing, we don’t have to worry about predicting demand anymore. Instead, we can leave capacity on—and pay only for what we use.”

In addition, we heard from Waldemar Ruggiero Júnior, infrastructure director at Bradesco, one of Latin America’s largest banking and financial services companies. “As mobile banking continues to surge in Brazil and we digitally transform everything we do, Tailored Fit Pricing gives us a simple and predictable cloud pricing model that can reduce operational overhead, so we can deliver cost-effective, client-centric services with our private cloud,” he says.
Like Dillard’s and Bradesco, other clients using Tailored Fit Pricing have reported improved peak performance and enhanced planning capabilities.

More Choices for Clients

Prior to Tailored Fit Pricing, clients managed platform usage under the rolling four-hour average (R4HA). While it solved clients’ needs for many years, and will continue to be the preferred pricing framework for some, the R4HA pricing model isn’t right for everyone. Business dynamics and the pace of innovation resulted in the need to spike usage at any given time without concern for managing against peaks. 

In today’s hybrid and multicloud world, choice and control are critical, especially while balancing performance, availability and security. As part of IBM’s goal to give our clients end-to-end control of the hybrid cloud platforms they rely on, we continue to innovate our extensive software portfolio, which has been thoughtfully designed for clients to accelerate their digital transformations. 

If you’ve started your own transformation, this may sound familiar, but we’re seeing clients:

  • Use APIs and cloud-native development tools to better utilize existing assets or evolve new services
  • Leverage IT operational analytics for insights and business efficiencies
  • Seamlessly integrate workloads across cloud platforms

In the end, we believe hybrid and multicloud are the future of enterprise IT, and Tailored Fit Pricing is one more step toward ensuring the IBM Z platform's essential role at the center of a secure hybrid cloud strategy. Learn more about Tailored Fit Pricing.

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