Improving Mainframes At I.B.M.

New Line By I.B.M. Is 'Open'

By John Markoff
The New York Times

September 12, 1991

I.B.M. took a significiant step yesterday toward opening its product line so that it could work more closely with its competitors, announcing seven new mainframes and more than a hundred hardware add-ons and software programs.

The company also said that the powerful water-cooled mainframes that it announced a year ago would begin shipping next week. It said these mainframes had top speeds 15 percent faster than I.B.M. had been projecting.

Analysts gave the International Business Machines Corporation high marks for its new-found openness, which includes a version of the Unix operating system for its mainframe machines and a strategy called the Information Warehouse, which is designed to ease the process of sharing information stored in a variety of formats. This would enable a company to link together information stored in different, incompatible data bases.

Yesterday I.B.M. said the new Unix, which would initially be attractive to technical users of its machines, would be available sometime during the second half of 1992.

Little Short-Term Impact

"The most interesting part of the announcement is that finally, publicly, across the board, I.B.M. has endorsed open systems and Unix," said Robert Djurdjevic, president of Annex Research, a market-research firm based in Phoenix. But he added that the shift would have little short-term impact on the company. "Clearly I.B.M. is doing a catch-up when it comes to Unix and open system," he said. "But I have to give them the benefit of the doubt because they are doing it across their product line."

Many people in the industry believe I.B.M. is counting on strong sales of its new mainframe systems to help salvage what is becoming one of its most difficult years, with profit margins at historic lows.

Mainframes continue to provide more than half I.B.M.'s profits. Last September, the company introduced a whole generation of mainframes, air-cooled and water-cooled, known as the System/390.

The machines are used by large companies like airlines, banks and insurance concerns.

Executives of I.B.M., which is based in Armonk, N.Y., said that if the economy held up, the company hoped for a generally positive second half of the year, barring surprises.

Nicholas M. Donofrio, the president of I.B.M.'s mainframe division, said analysts' optimistic projections that the company would sell as many as 400 of its top ES/9000 mainframes by the end of the year were in "the general ballpark."

I.B.M.'s stock rose $1.75 a share yesterday, to $101.375, on the New York Stock Exchange.

"This is a lousy year no matter how you slice it," said Stephen Cohen, an analyst who follows the company at the Soundview Financial Group. "I have a short-term buy on the stock on the basis that they will ship more of these systems than people are generally expecting."

New Storage Systems

I.B.M. also announced new optical and magnetic mainframe storage systems and extended the reach of its Escon fiber-optic cabling system, which can now be used to link computer systems as far as 37 miles apart.

But the company is clearly playing a catch-up game with its competitors, which have rapidly turned toward open systems based on industry standards in the last five years.

"This is I.B.M.'s attempt to find a relevant role for the mainframe in a PC-dominated world," said Frank Gens, a computer industry analyst at the Technology Investment Strategy Corporation, a Framingham, Mass., consulting firm. "I.B.M. has recognized that the mainframe is risking becoming completely irrelevant to what has become the core of computing in most corporations."

At the heart of I.B.M.'s strategy is the Information Warehouse framework, a standard model for managing computer data independent of its format or its location. Yesterday, the company said it was forming an international alliance of business partners to back the standard. It said that Information Builders Inc. and Bachman Information Systems Inc. were members of the alliance and that the companies would provide products that complement I.B.M.'s systems.

Analysts warned that one risk inherent in the new strategy was that it permitted other companies to substitute their products for I.B.M.'s inside large corporate data centers.

"If you stand way back and consider this strategy, you realize that corporate data can now be stored on Tandem and Digital mainframes as easily as I.B.M.'s," Mr. Gens said.

I.B.M. also announced a high-end disk drive for its mainframe systems to be called the 3390 Model 3. Each drive will store 50 percent more information than current models in the same floor space -- up to 90 billion characters of data. And the company said its Callpath software, used by telemarketers to display records associated with incoming calls, is now available on the company's mainframe and personal computers. The program was initially available for the AS/400 minicomputers.