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Dec. 10, 2009

Earlier this morning, IBM said it has expanded its new server lineup with a new mainframe computer designed to run only on Linux. This could be aimed at higher-end x86 systems, although the computer giant didn't say.

The move is seen as "agressive" by some more conservative observers that have been watching the rapidly dwindling mainframe market for the past several years.

There are no less than two servers in the Enterprise Linux Server line, and the starting price on the lower-end model with two processors, is $212,000. It scales rapidly up from there. This new computing platform is intended to be competitive with large multicore systems used for virtualization consolidation.

The Linux-specific line is IBM's latest effort to reduce the cost of its mainframe computers. It's high-end Z-10 Enterprise Class system can easily cost several millions. But in 2005, IBM started producing a smaller model, the Z-10 Business Class, which was initially offered at about $100,000, and to compete with a broader range of smaller enterprise servers.

IBM's new mainframe uses Big Blue's specialty Linux processor and runs either Novell SUSE or Red Hat Enterprise.

It doesn't use the mainframe operating system Z/OS but instead it includes mainframe management software as well as IBM's Z/Virtual Machine system.

Together, they constitute IBM's latest solutions edition, or what the company says are lower-cost, integrated stacks for its mainframe platform.

Reed Mullen, the System Z virtualization lead product planner, said that potential customers include companies that want to virtualize a lot of systems but aren't necessarily mainframe customers.

With starting price of about $212,000, IBM wants to compete directly against higher-end x86 servers. The next 12 months will remain critical for IBM's new mainframe strategy, and some market analysts did express some concern. Others disagreed, saying that Big Blue dosen't have a choice really, considering the steep drop in mainframe sales in the past 2 years, and especially in 2009.

Among some of the arguments that IBM will make for this system is its ability to dynamically add capacity in a running environment, Mullen said.

IBM expects to upgrade its Z-10 in February, in keeping with its three-year upgrade cycle. IBM's mainframe sales have been off 26 percent in the most recent quarter compared with the same quarter in 2008, and server sales have also been flat across the board, especially this year.

Server sales in 2008 were up about 0.8 percent from 2007's levels, however.

Brad Day, an analyst at Forrester Research Inc. said IBM has been working hard to reduce the cost of its mainframe software, which can account for half the cost of a mainframe, including personnel, energy and maintenance.

With this new hardware, Big Blue apparently wants to compete with x86 systems with 16 processor cores and above, Mullen said.

Anything that lowers the life-cycle cost of any system is critical, and by focusing on Linux, IBM is putting its focus to where most of the workloads are going. About 52 percent of the new growth of applications on mainframe today is led by Linux alone.

For all intents and purposes, IBM is one of the very few major market players left in the mainframe segment today in terms of market share.

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Source: IBM.

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