System z: Dinosaur or Phoenix?

Scan through IT news on any given day, and there's a good chance you'll find a story about some large organization or another replacing its IBM mainframe with servers running UNIX, Linux — and sometimes even Windows.

OS Roundup: Cut prices enough and customers will eventually bite is a common tactic for those selling commodity goods -- not high-end mainframes. Yet IBM recently did just that when when it marked down and bundled System z. Is this a sign the mainframe has lost its luster, or will the move unlock new markets?

It's a reminder that smaller-scale servers — even Windows servers — can do far more than was possible in the past, at price points very different from mainframes. UNIX, Linux and Windows servers have confidently been making incursions into Big Iron Country for quite some time.

That's not to suggest the mainframe's days are numbered — but sales of IBM's System z mainframes have certainly suffered markedly during the recession as organizations look to less-expensive commodity hardware alternatives.

But here's something strange: Just before Christmas IBM announced Korea's largest credit card company, BC Card, had decided to go with an IBM System z mainframe to support its payment system, rather than alternative products from HP and Oracle. "We chose System z for its continuous operation, service quality made available through IBM's mainframe software solutions and economic returns for the years ahead," Jeongkyu Lee, BC Card's Chief Information Officer, is quoted as saying.

I suppose we shouldn't be surprised that a company is attracted to a mainframe's prospect of continuous operation. That's what mainframes are about, and "zero downtime" is what the "z" in System z is supposed to denote after all.

What is more strange is the bit about economic returns for the years ahead, by which one understands that the IBM solution is perceived to have a low-cost one. Especially when you consider what the new IBM system is replacing. According to The Register, < http://www.theregister.co.uk/2010/01/05/ibm_bc_card_mainframe/>BC Card "is dumping its Unix servers, made by Hewlett-Packard and Sun Microsystems," in favor of the System z mainframe solution.

IBM is accused of many things from time to time, but being low cost isn't usually one of them. What's going on here is IBM's Solution Edition strategy, which was announced last August after a catastrophic 39 percent decline in quarterly System z revenues. The Solution Edition aims to make System z less expensive for companies that might otherwise use a bunch of UNIX or Linux servers or, as IBM rather grandly puts it, "Make It Easier and More Affordable to Enlist the Legendary Performance and Resiliency of the IBM Mainframe."

The BC Card deal was structured as just such a System z Solution Edition. It consists of IBM middleware (including DB2), CICS, WebSphere, Information Management and Tivoli Software. IBM Technical support services are also included. According to The Register, that means the price of the package comes in at 50 percent to 80 percent less than buying the pieces separately, and no more than 20 percent more than an HP Integrity server running HP's own HP-UX.

IBM said this is the first UNIX-to-mainframe migration in nearly a decade, so the Solution Edition strategy seems to be working. Cut prices enough and customers will eventually bite. IBM hasn't quite resorted to the old "Due to an ordering error we now have a warehouse full of mainframes that we're getting rid of at rock bottom prices" TV commercials to get System z revenues moving upward, but that may be the next action point in its marketing plan.

HP, Oracle and assorted other Linux and UNIX server vendors everywhere will be mighty relieved when IBM stops panicking about System z and resumes charging a more healthy premium for its mainframe products.

Paul Rubens is a journalist based in Marlow on Thames, England. He has been programming, tinkering and generally sitting in front of computer screens since his first encounter with a DEC PDP-11 in 1979.

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This article was originally published on Jan 5, 2010
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