IBM is kicking Sun when it is down by slashing memory prices on its Power Systems line. Memory prices are being slashed  by between 28 percent and 70 percent and it is convinced that will enable more than $500 million in competitive takeouts of Sun and HP each year.

IBM wants people to replace those machines with Power-based servers generally running AIX, but also with a smattering of Linux and i/OS. So far Big Blue has found a small number of companies interested in doing that but they make it a lot of dosh.

The number of defecting businesses has been growing lately too. Big Blue said that it nicked $150 million in competitive takeouts in the third quarter alone, and has busted through $400 million in the first nine months of the year. When IBM looked at the figures it worked out what was keeping more people from switching from Sun and HP was the relatively high price of DDR2 main memory on Power Systems. So by cutting the cost of this they could bag more clients.

On the high-end Power 570 and Power 595 boxes IBM has cut the price of raw memory cards and the cost of activating memory features such that it costs 40 cents per MB for memory capacity. That's a 70 percent discount off list prices the day before the price cut was announced. On a typical Power 570 configuration the memory price cuts will allow the overall system cost to drop by around 27 percent.

Big Blue has changed the prices on memory modules regardless of how much memory is in the DIMMs and how much is activated. It is 40 cents per MB no matter if customers want to use 1 GB, 2 GB, 4 GB, or 8 GB memory modules to build up their cards. Price cuts on the Power 520, Power 550, and Power 560 machines are not as drastic because the prices on that range were already quite low. Entry and midrange servers DDR2 memory costs 25 cents per MB, which is 28 percent lower.

It is the second time in recent years that IBM has cut prices for memory on Power Systems. This time the move is to encourage people to set up virtualised systems were memory is the major cost.