I.B.M.'s Latest Mainframe Adds Power and Encryption By STEVE LOHR http://www.nytimes.com/2005/07/27/business/27blue.html?pagewanted=print
I.B.M. introduced a new line of mainframe computer yesterday that is not only twice as powerful as its predecessor but also aims to make it easier for corporations to encrypt vast amounts of customer information and to bundle the workloads of many smaller computers onto an I.B.M. mainframe. The new line, called the z9, is the result of a three-year, $1.2 billion development effort involving 5,000 I.B.M. engineers. Maintaining the health of the mainframe business, which accounts for a small percentage of the company's revenues these days, is still important to I.B.M. The big machines, which typically cost several million dollars, pull in a lot of other business for I.B.M., including sales of software, services, financing and other hardware, like storage systems, analysts say. With all the related sales included, the mainframe franchise represents about a quarter of I.B.M.'s revenues and nearly half its operating profits, A. M. Sacconaghi Jr., an analyst at Sanford C. Bernstein & Company, estimates. So sustaining and, if possible, expanding the mainframe business is a vital part of I.B.M.'s strategy. Over the years, I.B.M. has done a remarkable job of renewing the mainframe despite predictions of its demise by industry analysts and rivals because of the arrival of the low-cost computing technology of the personal computer industry. The threat from server computers, powered by inexpensive PC-style microprocessors, is increasing, and companies like Hewlett-Packard and Sun Microsystems have sizable teams focused on getting corporations to abandon their mainframes. Yet I.B.M. has consistently made its mainframes more cost-competitive by updating the technology and by expanding their uses beyond the traditional role of processing huge volumes of transactions for financial institutions and other corporations, 24 hours a day, year in and year out. Analysts say the new z9 line, and new mainframe software also introduced yesterday, represent another step to reinvigorate the big machines that still occupy the heart of many corporate data centers. "I.B.M. is doing what it needs to do, which is to continue to invest in the mainframe to take on new workloads, so it's clear it is not an old technology and that the mainframe is not dead," said Clay Ryder, president of the Sageza Group, a research firm. In recent years, I.B.M. has opened its mainframe technology to different operating systems and modern software, like the Java programming language and Web services for handling data on any computer system. And the z9, analysts say, goes further in that direction. A new version of I.B.M.'s so-called virtualization engine, for example, will make it easier to run and manage hundreds or thousands of server systems off the mainframe. The technology creates virtual machines - software that mimics the performance of a stand-alone computer. For example, hundreds of instances of the Linux operating system, each running applications like e-mail or e-commerce Web sites, could be pooled on a single mainframe, which juggles them all. "Instead of buying a bunch of servers, corporate technology managers can create ones almost on demand by punching keystrokes on a desktop console in the data center," said Bob Djurdjevic, president of Annex Research, a consulting firm. "That kind of thing is a big deal for corporate customers." The new I.B.M. mainframe also aims to make it easier for companies to increase the security of customer data stored in their computers and to manage data security. Encrypting each personal record can take huge amounts of computer processing for companies with millions of customers, like banks, credit card companies, health insurers and publishers. I.B.M. executives say the z9 can overcome that challenge with its extra processing power and new security technology for encrypting personal data not only on the mainframe but wherever the information is stored, including computer tapes and disks. The loss of unencrypted customer information on tapes and disks has raised identity theft concerns in high-profile cases recently, including losses at a Citibank division and Time Warner. "This really changes what you can do with security and encryption," said George Walsh, an I.B.M. vice president who led the z9 development team. "Tapes falling off of trucks won't have to be a security problem anymore, because you can easily encrypt them." I.B.M. is marketing its new mainframe as a flexible engine behind a company's business - one that will help employees and industry partners share information and collaborate to increase productivity. That message relates well with I.B.M.'s pitch for its big services business, analysts say. You are a subscribed member of the infowarrior list. Visit www.infowarrior.org for list information or to unsubscribe. This message may be redistributed freely in its entirety. Any and all copyrights appearing in list messages are maintained by their respective owners.
