Reality Check: A Closer Look at System z's Late-2007 Stumble

Were System z's third-quarter shortfalls an aberration or a harbinger of a rough year ahead?

There's little doubt that the mainframe has staying power. How strong that power is, however, is the question. As System z closed out 2007 with slumping revenue and MIPS shipped, folks were bound to get a bit pessimistic.

True, IBM Corp. recently closed the books on still another year of encouraging mainframe growth. Big Blue also notched another year of mainframe milestones -- including a Green IT push which featured System z as its centerpiece. Big Iron, however, also ended the year on a slight down note: IBM reported lower-than-expected System z growth in Q3 -- much lower, in fact. Revenue from System z mainframe shipments was off 31 percent from the same period last year, according to market watcher Gartner. More alarming was a downturn in MIPS shipments, which dropped 21 percent.

The downturn came following three successive quarters of mainframe revenue growth -- and abruptly halted an even longer stretch of Big Iron MIPS growth. It also followed on the heels of a mainframe-centric Green IT push that -- according to IBM officials -- amplifies the eco-cost-effectiveness of System z.

What was the problem? Was System z's third-quarter shortfall an aberration or a harbinger of a rough year ahead? It's difficult to say, but if survey data and prevailing trends are correct, System z should be just fine. Consider just a few of the highlights of a mainframe market survey published last year by SHARE, the independent mainframe user group. SHARE sampled a broad range of mainframe users: application development and project managers (20 percent), systems administrators (17 percent), analyst/programmers (15 percent), and IT managers, directors, and CIOs (13 percent). If its results are correct, there's no cause for alarm. The mainframe has a lot more than just staying power, users indicate: it also has cutting-edge relevance -- not just the necessary relevance of an established, dependable, bet-the-business computing platform, but the relevance of the "It" girl that everyone suddenly wants to take to the prom.

According to the the SHARE survey, the mainframe today occupies a central role in many enterprise data integration efforts -- due to the preponderance of mission-critical data already residing on mainframe systems (which some estimates put at 70 percent or higher) as well as IBM's efforts to recast Big Iron as an information-sharing hub.

That's expected: the data is, admittedly, already there -- sitting in mainframe DB2, IMS, Adabase, and VSAM repositories.

The new spin is that Big Blue's zSeries Integration Information Processor (zIIP) -- announced two years ago this month -- is doing just what IBM hoped it would do: give customers an inexpensive means to move data processing workloads back to the mainframe -- and more incentive than ever, in fact, to keep the data that's already there on the mainframe.

In the SHARE survey, slightly over half (51 percent) of respondents house between 26 and 100 percent of their data on the mainframe. What's more, the largest individual segment of these users (27 percent) stores between 51 and 75 percent of its data on mainframe systems. The lion's share of accounting and financial applications -- the workloads that are, in a sense, IT's raison-d'etre -- are still running on the mainframe (59 percent), along with substantial percentages of IT and system monitoring tools (37 percent), HR and payroll applications (35 percent), and data warehousing workloads (27 percent).

The SHARE survey concludes that the mainframe is fast becoming an attractive new destination for information-processing workloads.

"The mainframe is increasingly being positioned, and seen by end-user companies, as the most centralized, secure database hub within the enterprise. Data integration efforts that are enabled within mainframe environments can take advantage of the systems scalability, security, and reliability," the report notes.

The mainframe has also emerged as an excellent service hub, the result of a complex-but-interrelated set of circumstances including, not surprisingly, the fact that so much mission-critical data is already stored on the mainframe. Given the popularity of specialty-processing engines such as zIIP and the zSeries Application Assist Processor (zAAP), which gives customers an affordable means to run the J2EE workloads, plus the mainframe's reputation for unbeatable security and reliability, it appears that the mainframe is a slam-dunk choice for service-enablement.

According to the SHARE survey, 43 percent of customers support (either directly or indirectly) between 26 and 99 percent of their SOA-based services on the mainframe. The largest individual segment -- customers who support between 51 and 75 percent of their services via the mainframe -- comprises nearly a quarter 22 percent) of all responses. These numbers could grow as enterprises (at this point still taking tentative steps toward service-enablement) commit more completely to the process. In this case, the SHARE report speculates, the mainframe -- with its SOA strengths and its all-in-one power-and-cooling proposition -- pick up additional workload activity.

"[O]rganizations developing and deploying SOA may find they require greater hardware capacity -- in terms of CPU and network I/O capacity -- to handle such additional processing workloads," the report indicates.

"Rather than acquire more server hardware to attempt to address growing SOA performance issues, mainframes may represent a more cost-effective option for leveraging existing resources. A mainframe system may be better capable of managing increasing SOA workloads with better economies of scale, and provide better scalability, availability, and increased memory."

While the SHARE survey outlines a number of other encouraging trends, it also highlights a few discouraging ones. As SHARE acknowledges, most mainframe data is still locked up (or "siloed," in data-integration-speak), while most integration data efforts are done via hand-coded scripting. That's likely to change, however, SHARE says, as organizations pursue enterprise-data integration efforts and continue to expose mainframe applications (and the data they generate or consume) via SOA efforts:

"There are proactive efforts underway to better integrate mainframe data with more distributed data environments, and to be able to deliver this data in real time, meaning within seconds."

All things considered, there's no reason to assume that System z's Q3 slump was anything more than an aberration -- a seasonal or cyclical slump, and not an indication of slackening Big Iron demand. More to the point, the trends and conditions that IBM officials have long talked up -- and which Mary Moore, System z security initiative leader with IBM, outlined to us late last year -- won't continue to hold sway.

"We're just seeing tremendous interest [in System z]," Moore said. ""We just don't see any of these [drivers] becoming less critical. These issues are getting more and more complex, and the enhancements we're delivering" -- she was speaking specifically about security -- "help customers address encryption, address policy management, [and] address information security. No other platform is as well suited for this as the mainframe."

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