IBM Entices SMB To Blades With Special Leasing, Entry-Level Switch

IBM Wednesday said it is rolling out financial incentives and a pair of new products intended to make it easier for solution providers to move small- and mid-sized business to a blade infrastructure.

Armonk, N.Y., IBM improved its leasing terms for SMB, released a low-cost 1Gbit Ethernet switch, and added a $500 rebate for solution providers that use an IBM Global Services installation service, said Matt Wineberg, worldwide product manager for IBM BladeCenter. Later this month, IBM also plans to release an iSCSI connector that can be used to integrate iSeries systems with BadeCenters, he said.

In the SMB market, Blades are seeing a bump in sales as businesses look to take on more compute power without increasing space in the data center and/or get more serious about server consolidation. Wineberg, who noted that IBM sells between one-fourth to one-third of its blades to customers with less than 1,000 employees, said SMB is "more and more critical each day, month and year."

Joe Vaught, COO at PCPC, a solution provider and IBM partner in Houston, is most enthusiastic about the leasing options. "SMB is growing so fast, and they would like to use something other than a bank's credit line to grow," he said.

IBM Global Financing (IGF), IBM's financing arm, has improved its rates and has begun offering SPIFs and better account service to encourage more SMB solution providers to use its services, Vaught said. In fact, he said an IGF rep recently helped PCPC close an $8 million dollar deal for one of its customers.Wineberg said IGF also has begun offering flexible leasing terms specifically for blades. The offer lets customers refresh the blades before the chassis, which generally has a longer life span. Or it lets customers turn in both at the same time, either at three years or at five years.

So, customers can choose a 60-month lease for the chassis and a 36-month month lease for the blades. They also have an option to renew the blades lease at a low price for another 24 months and turn it both blades and chassis at 60 months. Alternatively, the can turn in both the chassis and the blades after 36 months.

"This is ultimately a way for our customers to lease blades and chassis, however long they need or however short they need, within reason," said Wineberg.

IBM said the leasing offer is good through the end of the year.

On the product side, Wineberg said IBM's will release Wednesday a 1Gbit Ethernet switch priced at $999. That switch is about one-fifth the cost of a typical Ethernet switch that IBM currently offers for its blades. Wineberg said it lacks some of the "bells and whistles" in the more expensive model, such as layer 3 support, Spanning Tree Protocol and V-LAN limitations.Nathan Coutinho, product manager, SystemX and virtualization at Berbee Information Networks, Madison, Wisconsin, said the scaled down features ease configuration and maintenance complexity for customers, large and small. "It just works without a lot of configuration," he said. "That makes it really simple to use."

IBM plans to release the iSCSI connector for iSeries systems on May 19 at about $999. Wineberg said the device will make it possible for customers to integrate iSeries networking and server management with a BladeCenter.

IBM is offering solution providers that don't want to participate in complex installs a $500 rebate beyond typical discounts to resell a three-day IBM Global Services (IGS) package to migrate a company to a blade infrastructure. IGS has been offering that service to SMB since last year, but the rebate to solution providers just became available this month, said Wineberg. IGS prices its migration solution at $6,995.