Hear it from us, not our competition

The following questions and answers address frequent inquiries by new-to-mainframe decision-makers whose interest in IBM System z™ technology has been sparked. The sales of our mainframes have been growing steadily since the year 2000. Our most recent quarter showed a 25 percent year-over-year increase, a growth figure IDC marketshare reports show as higher than our competitiors.

The following Q & A provides some insight to explain that growth. IBM's mainframes—System z—are NOT going away. What our mainframe is doing is getting physically smaller, helping with power efficiency, becoming easier to operate, offering more security features and growing increasingly "open." These attributes, among others, form the source of appeal for IBM System z.

Q: Will there be enough of a skilled workforce to cost-effectively support my mainframe in the future?

A: We intend to maintain a balance between the mainframe growth and the skilled workforce. Although much of the mainframe workforce is coming up on the age of retirement, IBM has initiated a program called the Academic Initiative to help provide continued availability of mainframe skills. The goal is to grow the System z skills base to 20,000 skilled people by 2010. The program is designed to increase the availability of System z competencies by providing mainframe courses, student contests, interactive e-learning modules, workshops, residencies, internships and hubs that schools around the world are using remotely. The program is growing fast, and as of May, 2006, approximately 250 schools worldwide had educators enrolled in the IBM Academic Initiative.

Summary: In addition to educating the next generation of mainframe experts, our goal is to continue to simplify and enrich IBM z/OS® systems management capabilities. This can help customers to increase the size of their System z installations without necessarily increasing their staffing requirements. We are investing many millions in mainframe simplification, including a simpler management user interface.

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Q: Are ISVs interested in supporting the IBM mainframe over the long term and, if so, what are the benefits of their sticking with System z?

A: Independent Software Vendors (ISVs) are enthusiastic about System z, and IBM continues to recruit ISVs aggressively for the platform. Over 1000 ISVs build, sell and support their software applications on IBM System z9™. ISVs develop solutions for the traditional critical operating environments like z/OS and z/VSE™, as well as Java™, Linux® and Open Source. Mainframes typically run large-scale, critical applications that help drive the business of the world's major enterprises. We are definitely not talking basic print-file type applications here.

These application vendors recognize that the majority of the world's critical business data resides on IBM mainframes, including applications such as SAP, PeopleSoft, and Oracle. The security and resilience capabilities of the System z platform are legendary, per the Evaluation Assurance Level — a numerical grade assigned after the completion of a common criteria security evaluation.

Summary: Every year for the past five years, the number of ISV applications overall has continued to grow. As of May, 2006, there are 321 Software Developers with 877 applications for Linux on System z9. IBM delivers performance and flexibility which, in turn, help improve the performance of the ISV applications.

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Q: Will putting Linux on System z provide me with superior application availability, performance and TCO?

A: Linux on System z grows more cost-competitive with each year, due to refinements to host operating system, pricing and flexibility. The System z9 is designed to handle multiple workloads, and IBM z/VM® extends this capability to Linux users who run Linux on an Integrated Facility for Linux (IFL) under z/VM. By using these sophisticated systems-management capabilities, a single IFL might be able to replace numbers of Sun, HP or Intel® engines. In fact, many customers have realized significant savings by consolidating large numbers of servers onto a single System z footprint. The Nationwide Insurance Company recently reported at LinuxWorld 2006 that they were able to run 320 virtual machines (with a target by the end of this year of 600 virtual machines). In the December, 2005, issue of Byte and Switch, Hannaford Bros, Inc. reported successfully consolidating 300 HP Intel servers onto their System z. Although your mileage might vary, clearly there are significant potential benefits to be gained by consolidating large numbers of servers onto one, as Hannaford and Nationwide have done.

A primary strength of IBM mainframes is the capability to run multiple, concurrent enterprise applications and dynamically allocate resources designed to meet business requirements. This is different from dedicating a single server to a single application. The value of the System z is in its overall capacity and its ability to manage that capacity in a sophisticated cost-effective fashion, which is far more than the one-dimensional view of performance based on CPU clock speed.

IBM's virtualization software can enable the server's disk storage, memory, processor and network resources to be shared among all of the virtual servers, leveraging z/VM capabilities to manage the virtual servers dynamically to help meet the business objectives set by the user.

Summary: This virtualization software, coupled with advanced hardware technology like IBM System z HiperSockets™, can help eliminate the need for a potentially expensive and complex external network for inter-server communication, and the need to acquire dedicated resources for each individual server in the solution. Additionally, System z HiperSockets provides extreme security compared to the communication alternatives like TCP-IP, for example. System z provides the quality of service, flexibility and control, as well as the security IBM is renowned for — all within the price and value boundaries that customers seek.

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Q: Select analyst whitepapers contend that other systems can deliver better availability at a significantly lower total cost of ownership (TCO) of the IBM System z mainframe. How do we respond to that?

A: We consider those contentions to be just that: strongly held opinions. It is a mistake to limit analysis of the total cost of a system to factors such as hardware and software costs. This approach fails to include critical TCO components, such as the cost of outages, and security breaches, and advantages of the System z.

Although a TCO analysis that compares only software and hardware costs at times might appear favorable to distributed servers, it is IBM's position that a comprehensive TCO for any system should include continuing costs, such as software support costs, cost of downtime, and the cost of personnel to manage the systems, not just acquisition costs. Availability, business continuity, security, utilization and performance are critical elements to be considered in TCO analysis. Because mainframes typically provide higher utilization and automated workload, per processor software costs can be lower, software management costs can be lower, overall administration costs can be lower, power and cooling can be lower and there can be less demand for expensive floor space.

Summary: The bottom line is that the when you consider all of these critical factors, the TCO for mainframes can be shown to be lower over the life of the asset. The mistake is to measure TCO with just two variables, hardware and software costs. Doing that is like measuring performance based solely on clock speeds.

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Q: Is IBM maintaining its position as a technology leader?

The IBM mainframe continues to be a leader in the industry in many areas of technology, such as virtualization and systems automation technology, and such hardware innovations at the use of copper-based chips, and 90 nanometer technology. Unfortunately, this is often not recognized in the marketplace, particularly by our competitors. For example, in their October 17, 2005, press release, David Yen, executive vice president of Sun Microsystems's Scalable Systems Group, claimed that Sun was the first vendor to upgrade their high-end servers with 90 nanometer technology. The 90 nm refers to the 'thinness of the lithography' on the chip and is the basis of the photographic process to image nanometer circuit patterns on a silicon wafer. It is very important to processor performance.

Summary: This claim to technology leadership in announcing 90 nm was a real surprise to IBM, since we had already been shipping 90 nm microprocessor technology in the IBM System z9 for months.

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