Lego Consolidates Using IBM And 'Pay-As-You-Go' Model

IBM plans to convert the network of the world's fourth largest toy manufacturer to "on-demand" mode. At the same time, it will consolidate more than 230 Hewlett-Packard servers down to 34 IBM systems. Lego will be using IBM's Unix eServer p690s and p650s, eServer x440s, the IBM Shark Storage SAN servers, as well as Tivoli Storage Manager software.

Lego bought the servers and storage systems fully configured but will only pay for the capacity it uses on the equipment, using IBM's pay-as-you-go plan. According to IBM, it was Lego's seasonal fluctuations that made this on-demand model appealing. Toy companies can generate as much as 80 percent of their annual revenue in the period from October to December. In slower months, Lego can ratchet back down to lower capacity and less expense.

"We are operating in a very competitive environment and need to respond to the dynamics of our market at a moment's notice," said Hal Yarbrough, senior director for Lego Global IT, in an IBM statement. The on-demand approach will also let Lego set up pilot projects more easily and test their viability, without major investment.

IBM explained how its on-demand payment model works. A customer can buy a server with eight processors on (active) and eight processors off (inactive), for a total of 16 processors, for example.

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If the customer finds she needs more capacity, she calls IBM or orders online; IBM then sends a key code password. The customer pays 60 perecent of the overall cost of that fully active feature. Then the customer pays another 20 percent for every two processors activated.

With inactive processors, the customer pays 35 percent, then the remaining 65 percent as they activate the additional remaining processors.

IBM offers customers a 30-day trial and as they permanently activate processors, IBM resets their 30-day test period.

Another element, On/Off Capacity On-Demand, lets customers buy daily usage of power for 60 days, instead of having to pay 20 percent for additional capacity.

With On/Off CoD, customers can unlock any number of processors on their system, and IBM tracks the days of usage. IBM says it won't interrupt customer operations even if their trial period has ended.

This story courtesy of Internetweek .