Some of this article defintely does not make sense.
The issue of personnel for example. Sys admin's no longer need to be bothered with a 
lot of software maintenance on the server. With LINUX/390
software can be maintained for hundreds of servers by  the small VM staff. Also, the 
peaks and valleys of Web demand  is a reason companies who
depend on e-commerce are using the mainframe.  Handling the peaks and valleys is a 
mainframe strength.

"Tormey, Paul P" wrote:

> We are in the eternal struggle - trying to get Management to try LINUX on
> the zSeries.
> However, we are continually faced with the costs of Mainframe against Unix
> and Windows Servers.
>
> Does the note below make sense or is there a counter argument.
>
> Look forward to help form the team.
>
> Paul Tormey
> LAN Services
> Standard Bank of South Africa.
>
> 011 636 4103
> 083 252 5292
> [EMAIL PROTECTED]
>
> -----Original Message-----
> From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]
> Sent: 05 February, 2002 08:47
> To: Lea Van Der Want
> Subject: Mainframes are More Expensive Than Racked Servers
>
> IT INSIGHTS FROM META GROUP --- February 05, 2002
> Published in association with ITworld.com
> http://www.itworld.com/newsletters
> ____________________________________________________________________________
> ____
>
> RESEARCH HIGHLIGHTS
>
> * Mainframes Are More Expensive Than Racked Servers for Presentation
>   and Application Levels
> * Building the "Right" IT Organization
> * Managing the Middleware Portfolio
>
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> FEATURED ARTICLE
> MAINFRAMES ARE MORE EXPENSIVE THAN RACKED SERVERS FOR PRESENTATION AND
> APPLICATION LEVELS
>
> IBM and Computer Associates have been arguing that partitioned
> mainframes running Linux are competitive with rack-mounted servers as
> platforms for Apache Web servers and other presentation-level and
> application-level uses. Some users, particularly in the financial
> industry, are listening, and argue that more mature operations
> processes and advanced staffing skills as well as the extra management
> features of the mainframe make it the logical server for all aspects of
> important Web sites.
>
> Although staff and process maturity are a valid issue for some
> mainframe-focused organizations, we believe Linux-based mainframe
> partitions will not be competitive with "scale out" strategies based on
> rack-mounted, low-end Intel server farms for "edge functions" long
> term. Therefore, we believe the mainframe is the wrong platform for
> edge functions such as Web presentation. Not only is the mainframe
> hardware much more expensive per MIPS -- even with IBM selling Linux
> partitions at half price -- but VM software adds additional expense and
> support considerations. Personnel costs, which are the largest portion
> of the cost of a data center, are fairly equal. However, new software
> and skill development in the Web presentation arena is clearly focused
> on scale-out approaches based on many blades of commodity servers and
> network load balancers.
>
> The mainframe's strengths are vital in large-scale DBMS server
> environments, but are of far less value for relatively stateless edge
> services. This is particularly true in the Web publish pattern, where
> information is being published outbound from a Web site. In a Web
> server farm, load balancing and redundancy is typically provided via
> the network. If a server develops problems, network load balancers
> simply fail-route traffic to another server in the rack that is running
> the same load, and the bad unit can be pulled out and replaced with, at
> most, minor interruption to processing.
>
> The peaks and valleys of Web demand also make load management difficult
> on a mainframe, where the goal is often to keep the entire system
> operating at high capacities, such as 80% or higher. While robust
> mainframe workload management enables management of fluctuating demand,
> reallocating peak MIPS capacity is more expensive than with commodity
> Wintel or Lintel server farms. On a server farm, on the other hand,
> hardware costs are so low that the only important concern is that
> adequate service be maintained to customers during peak times. The low
> hardware -- and particularly software -- cost makes idle time on the
> processors during low demand periods a minor concern.
>
> One potential advantage of running the application and presentation
> layers on the mainframe, with the database layer, is faster response
> times. Each step in each transaction is milliseconds faster. However,
> in most cases, this speed differential is unlikely to make enough
> difference to justify the order-of-magnitude extra cost of the
> mainframe solution.
>
> The largest potential benefit from running edge services on the
> mainframe is leveraging the most mature set of operations skill sets
> and processes, as well as any excess cycles that may be available.
> However, long term, we believe the momentum and focus of deploying edge
> services on commodity scale-out solutions outweigh these benefits.
>
> USER ACTION:  Although the mainframe can generally be a more dependable
> platform, we do not believe the long-term challenges of maintaining
> management skills to run Web presentation services on the mainframe or
> the cost premium (vs. commodity servers) are justified for presentation-
> layer infrastructure. Furthermore, the lack of ISV enthusiasm and the
> decline in mainframe skills during the next five to seven years makes
> this a doubtful option long term for most shops.
>
> We recommend that organizations match the type of work being done and
> the service-level goals, such as availability and scalability, to the
> appropriate computing platform. A key consideration should also be
> existing operations process maturity and staff skill levels. However,
> workloads that easily scale out across multiple commodity servers
> should not be centralized onto more expensive platforms simply because
> of skill and process issues. In this case, the right answer is to
> improve the skills and processes associated with running scale-out
> environments.
>
> META Group analysts Rakesh Kumar, Val Sribar, Brian Richardson, Rob
> Schafer, Rich Evans, William Zachmann, and Philip Dawson contributed to
> this article.
>
> Read trend forecasts, cost-cutting ideas, and other information from
> META Group's Enterprise Data Center Strategies advisory service.
> http://itw.itworld.com/GoNow/a14724a51924a75999756a1
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> Briefing 1. The Business of IT Portfolio Management
> Briefing 2. Architecture, Program Management, and Human Capital:
> Balancing People and Processes
> Briefing 3. Infrastructure and Operations: Delivering on the Promise
> Briefing 4. ROIghtsizing the Application Portfolio: From Commerce to
> Customers
> Briefing 5. Business Portfolios and the Sustainable Innovation Community
> Briefing 6. The Future of Portfolio Sourcing
> Briefing 7. Security, Trust, and Privacy: Balancing Internal and
> External Demand
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> Click here to access these Portfolio Management Research Briefings.
> http://itw.itworld.com/GoNow/a14724a51924a75999756a6
> ________________________________________________________________________
>
> BUILDING THE "RIGHT" IT ORGANIZATION
>
> When modifying the IT organization, enterprises must consider existing
> performance and work activities -- including how they relate to one
> another -- as well as issues that the future organization intends to
> improve/solve. Cross-process integration and governance models should
> establish the baseline from which future directions may be mapped.
> Learn more by listening to "Building the 'Right' IT Organization," a
> series of three audio briefings presented by META Group analysts David
> Cearley and Dan Vogel.
>
> PART ONE: THE BASICS
> http://itw.itworld.com/GoNow/a14724a51924a75999756a3
>
> PART TWO: EVOLVING PLAN/BUILD/RUN MODELS
> http://itw.itworld.com/GoNow/a14724a51924a75999756a4
>
> PART THREE: GEOGRAPHIC IT ORGANIZATIONAL MODELS
> http://itw.itworld.com/GoNow/a14724a51924a75999756a5
> ________________________________________________________________________
>
> FEATURED RESEARCH
> MANAGING THE MIDDLEWARE PORTFOLIO
>
> Middleware supporting critical component models, application
> integration, data management, and other core application functions
> constitutes an increasing part of software expenditures. By 2003, most
> IT organizations will have amassed a diverse collection of platform
> components, including application servers, integration servers, data
> integration mechanisms, legacy connectivity adapters, content managers,
> commerce servers, and security apparatus. The convergence of e-business
> platform components, growing overlap of middleware products, and
> extensive availability of new e-business systems will create increasing
> redundancy in most organizations' middleware portfolio. During 2003/04,
> most Global 2000 IT organizations will struggle to reduce their
> middleware portfolio to manageable size and to implement controls on
> middleware investments.
>
> Read the full-text of this article (free member login required).
> http://itw.itworld.com/GoNow/a14724a51924a75999756a2
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> INFUSION PROGRAM: OPERATIONS EXCELLENCE
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