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Old Iron, New Markets

The mainframe entices customers in emerging economies

8/16/2011 12:31:15 PM | While the global economy continues its slow and uneven recovery and investment markets jump up and down like a caffeinated terrier, there’s been a surprising bright spot in the IT space: the IBM mainframe.

System z has enjoyed growth in consecutive quarters over the past year, as it makes inroads and wins clients in emerging markets. New customers in Eastern Europe, Asia, South America and elsewhere have fueled a resurging interest in this established and tested business server platform.

For Q2 2011, IBM System z revenue grew 61 percent and MIPS rose 86 percent. This helped the mainframe cap its best consecutive four quarters of revenue growth in five years.

“Since the zEnterprise system became available in July 2010, IBM has seen 24 new customers come on board the mainframe from growth market countries alone—and 68 worldwide since the launch,” says Greg Lotko, System z vice president and business line executive for IBM’s Systems and Technology Group. “We think about that as planting the flag or the seeds to continue to work with these clients into the future and help their businesses grow with new technologies and capabilities.”

New Markets, New Industries
According to IBM’s Growth Marketing Unit, this year’s client wins included a securities company in Asia, a bank in Latin America, a company in Mexico, a bank in China, a university in Brazil and a heavy-industry business in Europe. Clearly, the mainframe is appealing to a cross-section of industries with diverse computing needs

“We continue to have a large strength in the financial sector and in banking, but if you look at the types of companies that are turning to the mainframe—both inside and outside of growth markets—it’s really across all industries,” says Lotko. “It’s clients looking for a lower total cost of ownership (TCO) and a focus on flexibility—the ability to buy all this capacity and then, as their business grows, they don’t necessarily have to roll in new hardware and increase their data-center footprint; they can turn on engines and capacity and the software is as simple as a license change.”

The Mainframe’s Appeal
What else is driving this success in these markets? According to Lotko, mainframe’s track record has been a significant factor. Businesses coming to the online world today increasingly don’t have the luxury of trial and error in their data centers. Rather, they need tried-and-tested server platforms well suited for online-business computing requirements.

“The fastest-growing markets are choosing platforms that have been around for many years due to their hallmark benefits,” says Lotko. “Those benefits include performance, durability, reliability, scalability and flexibility. They want proven technology, yes, but they also seek a platform that has a reputation for regularly building innovation on top of that already-proven technology. That perfectly describes the mainframe. I believe this is why we are seeing gains across markets and industries compared to the competition.”

One important mainframe differentiator is the tight integration of the software and hardware, including the OS and middleware. Customers can realize the benefits of a platform on which hardware capabilities and process redundancies are integrated down to the firmware level.

Further, the mainframe has moved aggressively into the Linux OS and Linux workload space. Using its industry-leading virtualization capabilities, customers can benefit from running the open-source OS in a very stable environment, making the mainframe particularly appealing to those looking to Linux for their data centers. As Lotko notes, “people look at Linux on the System z and say, ‘Wow, this is a great way to make use of Linux.’”

Running Linux on the mainframe can be cost competitive when it comes to processing I/O-intensive workloads versus other platforms. “I’ve seen studies by systems integrators that show you can virtualize as few as 20 images and show a better TCO and total cost of acquisition—including the software—by consolidating those workloads with Linux on System z,” says Lotko. “Beyond Linux, you can look at the work we’ve done with z/OS and what that brings to the table with its own resiliency and scalability. Up and down the stack, customers can realize all sorts of mainframe benefits.”

Now and in the Future
With growing companies—many requiring an online presence and business model—a huge emphasis is placed on continuous uptime. Additionally, organizations increasingly want to access, collect and perform analytics on huge volumes of daily transaction data in order to act on it appropriately. All of this plays into the mainframe’s sweet spot.

“I believe the mainframe makes a lot of sense—both today and in the future—and it can be very powerful for many different businesses around the world,” says Lotko. “I’m not saying everybody needs a mainframe, but for those who want to differentiate themselves as a company that’s always on and always up, with no planned or even unplanned outages, the mainframe is a pretty compelling platform of choice. We have clients who have had their mainframe environments up and in production for 10 years or more and have never been down. That’s possible because of Parallel Sysplex capabilities, failover, rolling updates and all sorts of similar redundant backup innovations that keep mainframe businesses up and running.”

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