Making the mainframe 'sexy' again?

For years now many have thought the mainframe would become as outdated as the abacus, but yet they have not gone away. And if this week’s newly launched IBM mainframes live up to the billing, perhaps they will become as “sexy” to service providers as some other computing hardware these days.

The z196 and the zBX architecture will excite many in the telecom industry, as they bring new capabilities that are more suited to a reliable mainframe environment than other computing architectures.

“This can be good news for some of the very large companies using mainframes for back-end internal applications and for billing,” said Rakesh Kumar, vice president with Gartner Research, who noted that some operators have moved to Unix but a fair amount remain on the mainframe.

Though the media this week often focused on the substantial boost over the existing z10 platform, which will be useful for data-intensive and analytic workloads, what’s more important is the extensibility of this new line of mainframes.
“What’s significant about this is more than just ‘speeds and feeds,’ but the BladeCenter Extension [zBX] means mainframes can now plug into other kinds of computers,” Kumar said. “That means telcos can extend the reach of the mainframe onto other platforms provided by IBM, such the pSeries [Unix] and XSeries blades.”
By creating this “broad fabric” or “hybrid architecture,” operators in mature markets like North American and European operators will enhance their mainframes while simultaneously bringing other platforms — Unix, Windows, Linux — under the management of these machines. They can share virtual machines on the mainframe, as well.
For many, this mainframe will mean more efficient management of data centers, as the IBM strategy is to treat the data center as a single system
According to Kumar, the use of zBX will provide a number of options to service providers:
· A consistent toolset and mechanism for managing the joint environments
· Mainframe-class reliability and security to the blade systems
· Enhancement of dynamic workload management capabilities across platforms
“The virtualization management capabilities will extend from the mainframe to the zBX-installed hypervisor. In essence this could create a pool of virtual machines across the different systems,” Kumar said, noting that would be especially beneficial to applications running on the blade systems that need access to legacy applications or data bases on the mainframes. “All of these technologies should allow mainframe teams in user organizations to better tout the values of the mainframe as a modern and shared fabric announcement,” he said.
Whether the z-series will be enough to get Big Blue out of trouble in terms of declining mainframe revenues or even help in offsetting its anti-trust woes is not easy to predict.
Estimates for IBM’s new z-line of mainframes put profit margins at about 70% (versus a 46% margin for the company as a whole, according to Bloomberg Business Week). But even with those predictions, mainframes still account for only about 4% of IBM’s total revenue.

That said, it does make sense for IBM to strive for leadership in the mainframe market, as there are many peripheral and residual revenues that stem from it.

“IBM doesn’t disclose what mainframes bring in, but when we talk to clients and see what they spend, it amounts to tens of millions of dollars a year on hardware, software, middleware, consulting and so on,” Kumar said.

Though there has been a steady decline of mainframe revenues over the past few quarters, some think communications and other industries were holding off on investments because of knowledge of the IBM launch cycle and plans for the z-series. The ability to break up intense and complex transactions by parsing out different tasks to different systems might further boost sales in upcoming quarters. Additionally, companies under pressure to adhere to climate change regulations or shareholder pressure to reduce costs will like the higher energy efficiency ratings as well as the performance and extensibility of the new mainframes.

As a result, some analysts are predicting the growth rate to improve in the third and fourth quarters and to deliver double digit pre-tax income growth for the second half of the year.

Gartner numbers reveal that the mainframe had solid performance (31.8% growth year on year for Q2 2009) across the Asia-Pacific region, driven largely by new deals in Australia and South Korea. So if sales are weak in mature markets, perhaps there will be growth in emerging markets.