In-Depth

IBM Briefs Analysts on the Year Ahead

IBM mainframe chief Jim Stallings presents more evidence of a resurgence of Big Iron.

• By Stephen Swoyer
• 11/07/2006

Members of IBM Corp.’s Systems and Technology Group (STG) last week briefed analysts on what Big Blue has in store for the coming year. IBM mainframe chief Jim Stallings was in attendance, and impressed analysts with his news on the Big-Iron front.

Stallings spoke on the theme of “New Markets, New Customers, New Wins,” marshalling a handful of data points which he says demonstrate the mainframe’s resurgence. Mainframe sales through the third quarter of this year, for example, were up 25 percent on a year-over-year basis, with MIPS shipments increasing by 16 percent and revenue growth clocking in at seven percent per quarter. Moreover, Stallings said, IBM also improved its mainframe gross profit margins, and saw double-digit growth in its mainframe line in all regions, with especially strong interest coming from Asian and European markets.

Analyst Richard Ptak, a principal with Ptak, Noel, & Associates, says he was encouraged by what he heard at IBM’s STG meeting. For one thing, he observes, Big Blue was finally able to produce evidence that zLinux in production environments. “Based on IBM examples, customers are embracing Linux on the mainframe as a production platform, much more so than in the distributed world,” Ptak notes. “Other application areas include worldwide internet gaming, Web hosting, and support for Oracle and SAP applications.”

Elsewhere, IBM officials cited strong demand for the new reduced-cost z9 Business Class (BC) mainframes. Put it all together, Ptak argues, and you have a mainframe value proposition that more and more customers find attractive.

IBMers think so, too. Company officials noted that Big Blue has been able to maintain flat or near-flat mainframe pricing—even as computational performance has increased by an average of 28.2 percent each year. Then there’s the efficiency angle, which Stallings and other officials have emphasized throughout the year: distributed systems typically run at less than 20 percent utilization, while mainframes routinely operate at 80 percent to 100 percent loads.

Speaking of efficiency, there’s a strong case to be made for the mainframe on the basis of energy efficiency, too.

“[A] number of characteristics make mainframe operation more attractive,” Ptak points out. “These include consolidated processors—a more space-efficient configuration allowing up to four times the compute performance in the same physical space—and lowered power demands due to innovations ranging from active power control software to ‘refrigerated’ doors to selectively cool hotspots and reduced energy consumption.”

Let’s not forget security, either, Ptak concludes: with integrated identity management, EAL5 security, encryption capabilities and simplified key management, the mainframe is looking more attractive than ever.