At IBM the Mainframe Is the Main Event

IBM has once again made a hit with the mainframe, as Big Blue's Systems and Technology Group saw revenues increase 21 percent overall and mainframe sales rise nearly 70 percent in Q4 of 2010.

IBM just keeps on winning with the mainframe. Year after year, decade after decade, IBM keeps delivering new mainframe functionality and its customers keep on buying it.

In fact, the mainframe led IBM's Systems and Technology Group's 21 percent increase in revenues in the fourth quarter of 2010, as mainframe sales rose nearly 70 percent. The mainframe is IBM's heavyweight champ. It keeps going the distance and winning. If IBM were in a prize fight, the mainframe would be the main event.

The Q4 results show that though the mainframe server is a small niche in the overall, highly competitive server landscape, it remains a source of great value for those IBM clients who take comfort in its high levels of security and reliability.

Known for pioneering in the mainframe space in the 1960s, IBM continues to evolve and innovate in the mainframe arena, with a road map and vision for mainframe technology that stretches to 2018 and beyond, Rod Adkins, senior vice president of IBM's Systems and Technology Group, said in an interview with eWEEK.

Adkins said the fourth-quarter 2010 results for sales of the latest System z mainframe follow the pattern for new releases of IBM mainframe technology. IBM introduced its zEnterprise system in the third quarter of 2010 (July 22).

"This demand is customer-driven," Adkins said. "We introduced a new platform in the third quarter, and we typically do see, in the front end of the cycle, increased hardware sales and upgrades. So from a historical perspective this is following our traditional mainframe cycle."

However, Adkins said he believes that the zEnterprise "being the first multi-architecture workload optimized system" also helped to attract customer attention.

The zEnterprise's systems architecture enables workloads on mainframe, Power7 and x86 systems to share resources and be managed as a single, virtualized system. It sets up the big iron as the central management point of enterprise data centers, with other systems directly feeding off the mainframe's attributes.

During an earnings call announcing IBM's fourth-quarter results, Mark Loughridge, IBM's senior vice president of finance and enterprise transformation and chief financial officer, said, "Systems and Technology had fantastic performance, with 21 percent growth. We had growth in every platform, but the most impressive growth was in our System z mainframes, which were up almost 70 percent."

Loughridge added that STG delivered $6.3 billion in revenue for the quarter. "This is the best revenue performance in over a decade," he said. "Revenue was driven by growth in all brands, with strong double-digit growth in System z, Power entry systems, System x, disk storage, retail store solutions and microelectronics."

Moreover, "System z revenue grew 69 percent year to year driven by our first full quarter of shipments of the new zEnterprise," Loughridge said. "This performance reflects the value and innovation System z delivers to our customers. MIPS [millions of instructions per second] grew 58 percent year to year, the highest growth in six years, and we added 24 new System z customers to the platform."

Adkins said STG's fourth-quarter results suggest that the strategy IBM put in place more than a year ago is paying off. That is to deliver workload optimized systems, to focus on integration and optimization, to construct systems around business value, and to have a heavy focus on service management. The push on service management is an economic statement for IBM clients, he said.