IBM Mainframes: The Next Generation

In the biggest update to its biggest computer in more than two years, IBM on Tuesday unveiled its latest mainframe--a machine the company calls "the world's most sophisticated server"--capable of housing twice as many processors as current systems, each crunching data 40% faster. IBM has also built into the z990, code-named T-Rex, better ability for large companies to pay for the power they use, and will offer new time-sharing services for smaller shops. It's IBM's bid to keep its 40-year-old mainframe business relevant for a new generation of IT buyers while making mainframe-sized costs look more palatable.

"This is a buyers' market," Bill Zeitler, a senior VP and group executive at IBM, said at the launch of T-Rex, which becomes available next month.

By the fourth quarter, the new mainframe, which starts at about $1 million and can cost up to $20 million, according to analysts--IBM doesn't publish list prices for mainframes--will be able to house up to four "books" of eight processors, 64 gigabytes of memory, and 12 input/output connections. A 32-way system would be able to process 9 billion instructions per second, or 9,000 Mips--a three-fold improvement over IBM's current z900 mainframe.

In addition to scaling up for large data-center workloads such as running databases behind SAP systems and other enterprise apps, T-Rex can scale out to manage hundreds of virtual Linux servers for new workloads, IBM says. Mainframe sales represented about $2.9 billion of IBM's $81.2 billion in revenue last year, but sales of related software, services, financing, and data storage brought that total to about 25% of revenue. And while mainframe sales are still declining, they're falling less rapidly than overall industry sales of servers priced at more than $250,000, according to market researcher IDC. IBM's zSeries computers are picking up market share at the expense of Hewlett-Packard and Sun Microsystems. Transferring mainframe technology such as the ceramic packaging that houses a computer's processors and memory to other computing platforms is buoying IBM's profits, says Zeitler. "One of the primary reasons we've been able to hold margins the last couple of years, when it has been a buyer's market and a brutal competitive environment, is that we've been able to share technology," he says.

The z990 also will offer mainframe customers the ability to pay for workloads smaller than one processor, or engine. This summer, IBM plans to bring online a data center in Boulder, Colo., that will serve T-Rex capacity to customers on a shared basis--presumably making costs more manageable. IBM will also lower the starting price it quotes to mainframe customers by 40%, Zeitler says.

Meanwhile, IBM has been raising maintenance fees on older generations of its mainframes to prod upgrades, Gartner analyst Mike Chuba says. And while customers may see discounts when moving Linux-based workloads to the mainframe, IBM isn't offering the same deals for older apps. It's also been throttling back discounts since competitors Amdahl Corp. and Hitachi Data Systems exited the mainframe market in 2000. "IBM isn't aggressive on pricing of these machines for legacy workloads," Chuba says. "They pick and choose where they're aggressive."

In addition to the new hardware, IBM will deliver an updated version of its WebSphere Application Server for the z990, and has begun a beta test program for a version of its DB2 Universal Database for the system.