As expected, IBM announced buoyant revenue and growth for the System z in 4Q 2010, driven by the adoption of the zEnterprise. In its most recent briefing, IBM confirmed plans to move ahead with a number of items that have been promised for the z196 and zBX, such as x86 blades and business class machines.
But first to the numbers: revenues from System z mainframe increased 69% compared with the year-ago period, the best growth in a decade. Total delivery of System z computing power, as measured in MIPS (millions of instructions per second), increased 58%, again, the best MIPS growth in the past decade. For 2010 IBM reported revenue of $99.9 billion, up 4%. It also recorded a gross profit margin of 46.1% , the 7th consecutive year of increase.
Maybe even more encouraging is the number of virgin mainframe customers, or what IBM calls first-in-the-enterprise (FIE) customers. Sixty-one companies came to the System z (or came back to it after a long period of being dormant). These were not just companies coming out of emerging markets in Africa and Asia. To the contrary, the majority, 60%, came from established markets; only 40% came from emerging or, as IBM calls them, growth markets.
Linux apparently is driving a big part of the migration to the mainframe by these virgin mainframe customers. Half of them, 50%, are running Linux compared to the mainframe market at large. Among the market at large 32% have IFLs installed, representing just 19% of the installed base capacity in MIPS.
Since announcing the z196 last July, IBM has shipped 450 machines, amounting to an aggregate 1.5 million MIPS. Twenty customers also bought the zBX, which was announced in July but didn’t begin shipping until the end of the year. It will be some time before there is much data on what those customers intend to do with the device. DancingDinosaur already spoke with one customer who is planning to take a zBX in April or May. You can bet its experience will be recounted here.
IBM finally is starting to discuss the x86 blades in earnest. These will be general purpose blades. Already IBM is offering the Smart Analytics blade and the Power7 blade for the zBX. A DataPower blade also will be arriving in 2011. Finally, a business class z196 (smaller configuration, fewer MIPS, lower price) will be arriving later this year although it may not be referred to as a business class machine. IBM nomenclature is always a mystery.
More interesting is IBM’s renewed interest in hybrid workloads. The z196 and the zBX are ideal for workloads that cross platforms and operating systems. These probably are not going to be consolidation plays as is the case with much of the Linux on z interest. More likely these will be workloads in which pieces from different platforms are pulled together to deliver the complete work of a single application. IBM is playing with some of these in its own labs now. Something in the banking industry will likely be the first. Stay tuned.
This should be an interesting year as more z196 case studies come out. Independent Assessment published one of the early ones here. It expects to publish a zBX case late this spring. You’ll hear about it first here.