IBM takes cue from cloud for new pricing model

"What they've said to us on many occasions is, 'then, IBM, can't you charge me for the middleware in line with how I get paid for my solution?'" said Dave Mitchell, director of strategy for IBM's software business partners. Software-as-a-service providers typically charge clients only for what they use.

Mitchell compares the new monthly rental structure to mobile-phone subscriptions, where users sign up for a contract, committing to a certain usage level per month and agreeing to pay for additional use above that level. As with mobile-phone subscriptions, in IBM's monthly rental model, the more a customer commits to, the bigger the discount on the fee.

Also, IBM has chosen 20 of its most popular products and will let its clients mix and match the use of them in order to meet their monthly revenue commitment. For instance, if a customer signs up to pay for US$10,000 worth of software, the customer can use $7,000 worth of WebSphere and $3,000 worth of DB2, or any other combination that adds up to $10,000.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is Nancy_Gohring@idg.com

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