Executive interview: lowering the cost of enterprise IT

Gartner stated that Risc server shipments declined by 17%, while IBM claims the System z mainframe is the most cost-effective server

Gartner recently stated that Risc/Unix shipments declined by 17% in 2014 compared with the previous year. Yet IBM claims the System z mainframe is the most cost-effective server platform.

With the launch of IBM’s z13 mainframe, the company is hoping to tackle the economic arguments against reducing the amount of application workloads that run on the platform.

But the low purchase price of commodity x86 server hardware running Windows and Linux applications has led to IT departments developing and running applications on x86 systems rather than developing and hosting those applications on a System z mainframe.

As a system of record, the mainframe is often the server that ultimately processes the transaction. So, is IBM missing a trick?

The cost of mobile transactions

Moore's Law cannot keep pace with the mobile explosion, noted IT economist Howard Ruben in a recent paper. In his report, The Technology Economics of the Mainframe, Ruben, who is the founder of Ruben Worldwide, noted: "By 2018, each mobile consumer is expected to drive 5,000 or more system interactions per day. By 2025, with projected growth in mobile users reaching two billion, this could grow to an astounding 20,000 systems interactions per day per user, resulting in 40 trillion events per day. Moore’s Law cannot even come close to driving down costs (and power up) in the face of this demand increase."

In effect, the only way to keep up with the ever-increasing number of back-end systems that mobile applications interact with is to use a server platform that scales cost-effectively. According to Ruben, "Within the ranges experienced by most businesses today, the mainframe is inherently more scalable because decreases in unit cost offset volumetric changes more so than for commodity servers."

"Not everything is as cyclic as the mainframe, which is very cyclic for us," says Tom Rosamilia, head of IBM's system division, responding to the question of IBM’s poor Q4 hardware sales.

Revenues from IBM's Power Systems were down by 13% compared with the same period in 2013, while revenues from System z mainframe server products decreased by 26%. Systems storage revenue decreased by 8%.

He says: "Over the years, we can track what mainframe sales do over the first couple of quarters, and what they do towards the end of the cycle."

Rosamilia attributes the decline in mainframe sales to the refresh cycle. "It was the 10th quarter since we refreshed. Typically, people are waiting for the next new one."

He adds: "We've seen some wild swings in the past several years. I've seen cycles that were down 26%, then up 70% the following year."

When asked whether the results show that people may be moving off mainframes, Rosamilia says: "You can't look at the peaks and valleys; you have to look at what the installed base is doing, because when they are refreshing, they are buying. But it does not mean they are de-installing mainframes when they are not buying; it just means they are happy with what they have."

IBM usually releases a new mainframe once every 10 quarters. "Our customers are pretty good at anticipating when one is due, even if we don't tell them."

The role of the z13 for enterprise mobility and analytics

As expected, the new z13 increases processing power over the previous generation. But on top of this, IBM is positioning the new mainframe in the domain of systems of engagement. Rosamilia says: "The z13 has truly been built for the mobile economy. Of all the mobile transactions that get launched, a lot land on enterprise servers. For each smartphone transaction - whether it's from a bank, a retailer, or a travel booking - I have clients around the world who tell me that half their banking transactions originate from a mobile device." 

In Q4, mobile sales exceeded online sales. This mobile avalanche is driving the need for really reliable, scalable and dependable back-end systems." As such, he says the z13 will support 2.5 billion transactions per day.

The other difference from the previous generation is that IBM now allows analytics workloads to run alongside transactional workloads.

"In the past, it was fairly unusual for people to run analytics on the same system as transaction processing, which requires a near-instant response." But with the z13, he says it is possible to run analytics at the same time; in other words, in-transaction analytics.  

Rosamilia says: "I can now do fraud-prevention or anti-money laundering at the moment of the transaction, instead of waiting to find it later."

According to Rosamilia, this is possible because IBM has tripled the memory space available in the z13.

Why not deploy on a mainframe?

Rosamilia claims the mainframe is the most cost-effective enterprise server platform. He says 30% of the mips used on mainframes run Linux workloads. "We can support 8,000 virtual machines on one box."

As evidence of the cost-effectiveness of the architecture and the Power system hardware, Rosamilia says the OpenPower consortium – of which Google is a founding member – now has 90 members.

Rosamilia argues that moving to workloads, x86 severs may provide good enough technology. But, he says: "What if you can provide better than good enough." Systems based on the Power 8 chip, such as IBM's Watson analytics engines, run many times faster, claims Rosamilia.



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