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Is IBM's mainframe server pitch to the midmarket a viable one?

Elisabeth Horwitt
For years, the mainframe has been associated with large enterprises, not only because it is powerful, but also because it is costly. But now, midmarket organizations are being pitched their own version of a mainframe that's powerful but not quite as costly as an enterprise mainframe server. The question is, does a mainframe server make sense for a typical midsized shop?

IBM announced in October the z10 Business Class (z10 BC), a compact

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mainframe server aimed squarely at the midrange market. With a $100,000 starting price, the z10 BC accommodates up to 232 x86 servers and is said to be 40% faster than its predecessor, the z9 BC. Furthermore, with the exception of scalability, it has most of its larger sibling's strengths, including partitioning, encryption and Linux support.

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Shortly after the z10 BC introduction, Hewlett-Packard Co. (HP) announced that 250 of its customers worldwide have migrated from IBM mainframes to HP Integrity servers in the past two years. This mainframe migration has enabled companies to save "up to 70% in operational costs," plus $1.5 million to $23 million in capital savings, HP claimed.

IBM promptly fired back with its own server consolidation TCO numbers, claiming that a single z10 delivers capacity that is equal to nearly 1,500 x86 servers, with up to 85% less energy costs and up to 85% smaller footprint. IBM also pointed out that HP's TCO numbers derive from a handful of individual customer cases, not a broad study. Furthermore, the numbers involve older mainframe models such as z9, running proprietary operating systems such as z/OS, not Linux.

IBM also countered HP's claims that mainframe support is dwindling. It pointed out that more than 1,400 independent software vendors are developing applications for System z, and more than 500 universities worldwide have worked with IBM to teach mainframe and large-systems skills -- compared with 24 in 2004.

Dueling claims aside, the bottom line is that both IBM mainframe servers and x64 servers like HP's Integrity represent viable options for midrange firms with escalating application workloads, said Andi Mann, a research director at Enterprise Management Associates in Boulder, Colo. "Midrange companies are unlikely to have a mainframe, but IBM would like to see them get one. That's what the z10 BC is all about."

Midmarket companies outgrowing their Windows server farms typically turn to Unix and then, as workloads continue to grow, to Unix clustering or perhaps virtualization, Mann said. But another option has become increasingly viable for midrange firms, according to Mann: an IBM zSeries mainframe running Linux.

"The mainframe was a virtualized platform before anything else was," Mann said. For midrange firms looking to consolidate an unwieldy server installation, a z10 BC offers easier administration and fewer moving parts than a Unix cluster, he added. The zSeries architecture comprises partitions designed to run specialized applications such as WebSphere, Oracle financials and middleware.

Linux definitely changes the TCO equation, Mann agreed. "One of the reasons companies have moved away from mainframes is that z/OS and MVS are inflexible and proprietary and require very specialized skills." In contrast, a z10 running Linux is "a flexible and open platform" whose software costs are far lower than those of proprietary big iron, he said.

Recent market numbers from Stamford, Conn.-based Gartner Inc. show that IBM retains a dominant role in the worldwide server market, through its z- and pSeries systems.

Midrange companies are unlikely to have a mainframe, but IBM would like to see them get one.
Andi Mann
research directorEnterprise Management Associates
In August, Gartner reported that IBM's share of worldwide server revenues went from 29.6% in 2007 to 31.2% in 2008, and that the vendor had experienced "solid increases" in its System p (Unix) and System z lines. HP still led in server shipments, however, with IBM trailing a distant third, the research firm reported. Neither figure is surprising, given the February introduction of the z10 and the sizeable price tag of big iron.

But the mainframe server remains a tough sell for a midmarket organization. One reason is the need to purchase a large chunk of iron and computing capacity in one gulp, Mann said. "With a server like Integrity, you can start with a single rack and pay as you go, adding blades." Another limitation is absence of Windows support.

Although the server consolidation pitch is a compelling argument for a midmarket organization suffering from server sprawl, there are bigger issues at hand -- like who's going to operate it. "The challenge is the mainframe is basically promoting the use of a platform that requires a different skill set to manage," said Charles King of Pund-IT Inc. in Hayward, Calif. And while IBM would argue that its mainframe training programs are aggressive, "the barriers are way too high," he said.

King said the decision to move to the mainframe platform happens at a much higher strategic level. But if the decision is made at the lower level, the barriers of culture and skill set are impossible to overcome.

He added, however, that the reason IBM is doing so well in China and India is that both those markets are turning out thousands of IT professionals who are serious about adopting business class whenever they can. "They have the bodies to throw at it," he said. "That's a discretely different work environment than in the U.S."

Elisabeth Horwitt is a contributing writer based in Waban, Mass. Write to her at editor@searchcio-midmarket.com.


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