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Gauging the Health of the Mainframe Market

An IBM executive shares his view on the mainframe's present and future.

An IBM executive shares his view on the mainframe's present and future.

It's been another busy year for IBM in the mainframe space. The introduction of the IBM* System z9* Business Class (z9 BC*) platform in late April was a clear indication that IBM plans to remain committed to the mainframe's future and make visible moves into the small and medium business (SMB) space.

IBM Systems Magazine, Mainframe edition, had an opportunity to speak with Bob Hoey, IBM vice president of sales for the System z* platform. He talked about the current state of the mainframe market, some of the hot areas of interest and some of the pricing initiatives IBM is engaging in to keep current mainframe customers up-to-date while enticing new customers to the mainframe fold.

Q: Could you tell us a little about yourself and your experience in the IBM mainframe realm?

A: I took over this job as worldwide vice president of sales for System z a little over three years ago. Before that, I was vice president of sales for the financial services sector in the Americas. The transition from the financial services sector to the System z platform was primarily driven because about 50 percent of System z sales are to financial-services sector customers, such as banks, insurance companies, brokerage firms and financial-services companies. So, I knew a fair number of our mainframe customers coming into this job - and not just by the serial number of their processors and ZIP code their machines are installed in, but by their personalities. I also had an understanding of the business and infrastructure solutions that are of value to these customers. It's not unusual for someone to move from the financial-services sector over to the System z hardware brand.

Q: Critics of the mainframe have continually - and inaccurately - predicted its demise going on 40 years now. How do you and IBM see the health of the mainframe in today's IT market space?

A: I see a robust future for the mainframe going forward. Frankly, we just brought the System z9 to the marketplace, and it's selling well. IBM made a substantial investment into the development of this platform from a hardware and software perspective. Clearly, IBM wouldn't have made that investment if we didn't think we could sell sufficient MIPS in order to recover an appropriate return on that investment. Given that, IBM continues to believe there's a long future for the mainframe product. IBM continues to invest substantially in enhancing this platform, and we expect it will continue to create client value for years to come.

This platform has a 40-plus year history, and our expectation is that it has many more years in front of it. Toward that end, we're continuing investment into the development of hardware, including the System z Application Assist Processor (zAAP) for Java*-based workloads and the System z Integrated Information Processor (zIIP) for DB2*-type workloads. Additionally, we're making enhancements to z/OS*, in areas like the z/OS encryption facility and the expansion of the enterprise capability of the integrated crypto-support facility. We have plans on the table going forward to continue to expand the enterprise role of the mainframe in the areas of security, data processing, service-oriented architecture (SOA) and mixed-workload capabilities. So, I'm very optimistic that this platform has a long and healthy future in front of it, as we continue to invest in it to create additional demand for our customers.

Q: What is one of the more notable challenges, if any, IBM would like to address in the mainframe space?

A: I would say that we do have a bit of a challenge today in that a large portion of the revenue we receive for this platform comes from a small number of very large customers. With the introduction of the z9 BC platform we're trying to expand the breadth and depth of our users at the SMB end of the spectrum. In particular, we are right now looking at how we price the low end of the platform, and we're comparing it to alternatives customers often look to - such as UNIX and Intel* - and looking at the pricing gap that may exist there. We're assessing the price points at the low end of the market space, and we're challenging our own thinking and asking if we need to push reductions in the total stack price in order to expand the number of low-end mainframe footprints that are out there. We're particularly paying close attention to high-growth countries, such as Brazil, China, India and Russia, where customers don't have a mainframe today but for which buying their first mainframe makes sense. We're anticipating future announcements for the SMB-end systems that will allow us to expand the mainframe space so we won't be so largely dependant on our high end - who we'll always cater to and work to support.

"The challenge here for IBM is to get customers to take the time to evaluate the implications of simplifying their IT environment and moving workloads off UNIX and Intel platforms onto the mainframe, leveraging the specialty engines." -Bob Hoey, vice president, System z sales

Ryan Rhodes is a freelance writer for IBM Systems Magazine.


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