Legacy IT vendors transform to survive the mobile, cloud evolution
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Whatever fortunes lie ahead for the mainframe, you have to admire IBM's dogged determination to keep those systems relevant to corporate computing in the modern era.
In late July, the company introduced the latest inheritor of its almost 50-year-old line: a lower-end machine called the zEnterprise BC12. The new system has a starting price of just $75,000, is targeted at red-hot application markets -- such as cloud computing and data analytics – and is equipped with improved engines to run Linux workloads faster, the open source operating system that has fueled much of the mainframe's recent growth spurt.
Surprisingly, in its call to financial analysts last week, IBM reported that second quarter revenues from its System Z mainframes grew by 10% compared to the same quarter last year. Revenues from its other server platforms, including its Power Systems and Intel-based System X lines, fell 25% and 11% respectively.
Some analysts aren't completely surprised by the System Z's mini-resurgence, given IBM's attempts to make the line more relevant to younger administrators through tighter connections to Linux and the open source community.
"IBM has done a good job making sure Linux [on its mainframes] supports Web workloads and cloud computing," said Jean Bozman, research vice president with IDC's Enterprise Platforms practice. "But from a more human standpoint, IBM has kept mainframes up to date among younger people who want to deploy an enterprise Linux server."
The system's lower price point, coupled with the redoubled focus on Linux, could also bring new appeal to smaller IT shops that had been priced out of the mainframe market. It will also help IBM compete in emerging markets such as Africa where local programming and management talent are more Linux-oriented, Bozman said.
Despite the arrival of lower-cost models and the company's marketing efforts to dress up the venerable system to blend in with the modern computing era, many remain skeptical about its price-performance viability, given the competitive alternatives.
"Cost is a huge impediment to mainframes," said Robert Crawford, an operations architect who oversees the mainframe strategy for a large insurance company in south Texas. "IBM will talk about the better reliability and security they have built in, and that is true, but everyone is so budget-conscious since the economic downturn [that] they are willing to go with cheaper alternatives even when they know they aren't as good."
Gary Crook, president and CEO of Heirloom Computing Inc., specializes in converting mainframe applications so they work on more contemporary systems. He agreed that the economic downturn has bumped the mainframe out of some IT purchasing conversations. This doesn't diminish the value mainframes could still play in heterogeneous IT environments, he added.
"IBM mainframes aren't in the forefront of most people's minds. But if you took it out of mainstream, then pretty much everything else stops working," Crook said. "All financial and insurance institutions depend on these large, complex [mainframe] systems. There's a huge amount of value in them because of the applications they run."
Generally, there has been some migration off mainframes, which, in some cases, is a good thing, according to Crook. But with many large enterprises housing mainframes for decades, migrating workloads onto modern, distributed platforms can be technically challenging and chocked with risk. It is hardly an all-or-nothing proposition that is better considered on an application-by-application basis.
"There's an analysis that must be done for any migration. Some companies have a payroll-processing app they can move over to a contemporary system without too much risk. But they need a proof of concept in order to get comfortable with the notion that they could actually turn the mainframe off at some point," Crook said.
An increasing number of IT shops are looking to break from their mainframe bonds, said Ron Langer, a sales director with Tallahassee, Fla.-based Asysco, a company that has been in the mainframe migration business for over 30 years. He cited the overall costs associated with buying and supporting the systems, along with the increasing difficulty of finding administrators and managers with the proper skill set.
Only 3.1% of respondents to TechTarget's 2013 data center survey said they have deployed IBM's z/OS mainframe operating system to run mission-critical applications in the datacenter. However, 7.7% said they used mainframes to operate Linux-based workloads in their environments. Only 4.1% of respondents said they have a z/OS operating system installed in their data centers.
As a whole generation of mainframe IT veterans retire, or are close to it, finding properly trained younger replacements is difficult because many universities have dropped courses in a number of mainframe-related technologies. Langer put it bluntly: "No one is looking for Cobol programmers these days.
"I have a programmer friend with a lot of experience with both C# and Cobol. When he put Cobol on his resume, no one looked at. When he added C#, all of a sudden he started getting tons of hits," Langer said.
IDC's Bozman countered this view, saying IBM has spent generously on helping establish university programs through partnerships with business organizations to stimulate interest in mainframe technologies. "Using Linux as a hook will help a great deal in getting younger people to engage," she said.
IBM several years ago launched an academic initiative designed to address the mainframe needs of companies by getting universities to start programs that would produce students with the skills needed to develop and administer mainframes. IBM now has an affiliation with 1,070 universities in 90 countries, helping them create curriculums for building mainframe skills, according to Doug Balog, general manager of System z.
Ed Scannell, Senior Executive Editor asks:
What are your mainframe plans?
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