IBM Revives The Mainframe
January 30, 2002
NEW YORK - The old fashion adage "what's old is new again" is also true for technology--or
at least, true for IBM. The company has seen a steady decline of its flagship mainframe
computers for 12 years. That is, until this past year.
Mainframe computing capacity--the metric by which IBM and others measure growth grew by 12% in the fourth quarter. The company, which announced yesterday that Samuel Palmisano would succeed Louis Gerstner as chief executive in March, attributes the resurgence partly to its focus on Linux.
Today IBM Senior Vice President William Zeitler will announce at the Linux World
conference that IBM has already recouped nearly all of its investment in Linux development,
which has totaled about $1 billion over the past few years.
IBM was an early proponent of Linux, believing that it offered a less expensive, more flexible, open approach to enterprise computing. In addition to selling Intel-based servers running Linux, as most of its competitors do, IBM went one better last week and announced a $400,000 mainframe that runs nothing but Linux. It's significant because mainframes have historically been proprietary systems costing as much as $1 million.
IBM's Linux mainframes, part of the "z series" of servers, cost roughly half that of its older models. IBM says one of the benefits of Linux-based mainframes is that they don't require users to have traditional mainframe expertise.
"We can drive down the total cost by helping customers to consolidate the servers they have," says Pete McCaffrey, director of z-series marketing. By introducing a mainframe with the easier-to-use Linux operating system, IBM is "taking the mainframe out of the data center and making it available to customers that don't have mainframe skills," he said.
As IT spending continues to be squeezed, companies like IBM will pitch their products as being cheaper to own and maintain. In fact, Sun Microsystems is pursuing a similar strategy. For large companies, consolidating dozens or hundreds of servers around a handful of more powerful systems can cut down on costs significantly. Naturally, Sun and IBM both believe their approach is the best one.
"When it comes to consolidation no one even comes close to what we offer," says Shahin Kahn, Sun's chief competitive officer. "What IBM is doing is trying to give mainframes a facelift."
Customers can expect the back and forth between the two rivals to continue. Unlike Sun, IBM has not been known for trash-talking its competitors--at least not publicly. Maybe that will change under Palmisano. His challenge isn't as tall as Gerstner's when he took over the company in 1993. But kick-starting revenue growth at an $86 billion company won't be easy. Perhaps IBM will look to its past as a way to ensure a healthy future.