IBM Offers Financing for Servers Bundled with VMware vSphere 4

In an attempt to make it easier for businesses to bring VMware virtualization into their data centers, IBM is offering a special financing package for its System x and BladeCenter servers bundled with VMware's vSphere 4 virtualization platform. Key to the financing package is the trading of up-front costs for monthly payments on systems as low as $5,000. One analyst says by eliminating the up-front costs the IBM financing deal removes a key barrier to virtualization adoption.

IBM is offering special financing for its System x family of servers that are bundled with VMware's vSphere 4 virtualization platform in a move that aims to make it easier for businesses to bring virtualization into their data centers.

The financing plan, which essentially trades hefty up-front costs for more manageable monthly payments and can be used on purchases as small as $5,000, covers IBM's entire line of x86 systems, including rack and tower models as well as BladeCenter blade systems.

It also includes the System x3950, which VMware used as its reference platform while developing vSphere 4's scalability capabilities.

The goal of the financing package, which was announced June 30 and will run for the rest of 2009, is to offer businesses a way of adopting virtualization technology during these recessionary times, when money is tight, according to Alex Yost, vice president of IBM's Systems and Technology Group.

"Our new financing options offer access to capital at competitive rates and monthly payment structures based on fair market value leases instead of up-front cost to help clients improve the cash flow and financial metrics from their IT upgrades," Yost said in a statement. "Today, IT projects need to preserve cash and provide a healthy return on investment."

IBM officials used the example of VMware technology that would enable a business to virtualize 70 workloads bundled with a System x3850, which normally would sell for about $59,000. Through the financing plan, a company could purchase that system with no up-front costs and monthly payments of about $1,675.

IBM is planning to extend the financing plan to its iDataPlex servers later in 2009.

Charles King, an analyst with Pund-IT Research, said most server financing offers amount to little more than talk. However, IBM's plan to offer financing for servers with bundled VMware technology makes sense because it addresses how to consolidate x86 workloads onto virtual machines and the fact that many companies are unable to take advantage of virtualization's capabilities because they can't afford the up-front costs.

"Some might scoff that such 'no money down' offerings are mere gimmicks that have more in common with used car sales than business computing," King wrote in a report issued July 1. "But those voices either ignore or are ignorant of the deleterious impact that ongoing data center power and cooling expenses and system complexity can have on IT TCO. By assisting qualified companies to gain access to combined System x/BladeCenter and vSphere solutions, IBM is helping those customers to immediately gain the potential benefits of virtualization and improve their cash flow by reducing IT costs."

VMware announced vSphere 4 in April and released it a month later. The platform is an update to the company's ESX Server technology, and was designed with cloud computing in mind.

Among the new features in vSphere 4 are scalability of up to 512 CPUs on up to 320 virtual machines, the ability to address 1TB of server memory and support for 64 processing cores.