Taking Down the Mainframe

DancingDinosaur loves headlines like this:  Will the cloud take down the mainframe?    This could be a very short answer: No. Or maybe a slightly longer answer: highly unlikely. Or a snide snarky answer like; not in your lifetime, pal. The author, Tom Taulli, is a well recognized and highly credible technology writer. So, let’s take this seriously and see where it goes.

Taulli starts right: “If you use a bank account, the healthcare system, various government servijces and insurance, then there’s a pretty good chance that the transactions were processed through mainframes.  The fact is that much of the Global 2000 companies use this technology.” Nothing to quibble about there.

And he continues in a way each reader of Dancing Dinosaur will likely agree: If you use a bank account,  healthcare system,  government services and insurance, then there’s a pretty good chance that the transactions were processed through mainframes.  Much of the Global 2000 has long used this technology. 

Dancing Dinosaur would take it even further: if you do anything through a smartphone beyond making a basic phone call by the time you get an acknowledgement of what you just did there is most likely a mainframe involved. 

Taulli then finishes his case: “If you have huge amounts of data that can’t be let offsite for regulatory reasons, you probably need something that looks like a mainframe.” Mike Loukides, VP of Emerging Tech Content at O’Reilly Media embellishes the idea. “Terabytes are easy now, but if you’re storing high resolution medical imagery, you’re talking petabytes fairly quickly.”

The IBM Z platform continues to experience storage growth. It also is seeing innovations such as cloud-native development and strong improvements in processing power. 

IBM picks up the story at that point: “The IBM Z business isn’t going anywhere,” said Ross Mauri, who is the general manager of IBM Z.  Huh, Does this means what I think? What he more likely meant, an IBM spokeswoman replied: “IBM Z is alive and well. MIPS growth is substantial. Customers are leaning heavily on Z during Covid.” So, she concluded; “IBM Z definitely is NOT being discontinued. To the contrary, she adds, IBM already is working on zNext and beyond. 

“In fact, since announcing IBM z15 in September 2019, the company reports 75% of the top 20 global banks are using the platform, Mauri continued. He also rattled off growth being driven by Linux and Red Hat OpenShift on IBM Z. Installed Linux MIPS increased 55% from 2Q2019 to 2Q2020–while the platform added  more than 100 clients ready to start with Red Hat OpenShift. 

Finally, while the general business press was bemoaning the decline in business revenue due to the pandemic, even implying a catastrophic downturn, Mauri suggests the Z is weathering the storm:  “COVID-19 has unearthed a renewed focus on IBM Z to help keep the world’s financial trading, retail transactions, insurance claims processing, healthcare IT, and more afloat.”

IBM Z clients activated nearly 4x more general-purpose capacity-on-demand in 2Q 2020 compared to 2Q 2019. 2019 was the last strong year for any IBM platform and was especially good for the Z, only platform reporting positive revenue gains that year.

As the IBM 2020 annual statement says: For the year, we generated $73.6 billion of revenue, a decline of 4 percent excluding the impact of currency and divestitures. Much of this reflects the broader uncertainty of the macro environment, which also affects our clients.

Still it reports cloud-related revenue grew 20 percent to $25.1 billion, excluding the impact of currency and divestitures, and now represents over one-third of IBM’s total revenue. Red Hat was a key driver with normalized revenue growth of 18 percent in 2020 and a backlog topping $5 billion for the first time at year end. Red Hat, together with IBM’s modernized Cloud Pak solutions and delivered overall software revenue growth. Global Business Services cloud revenue grew at a double-digit rate as it focused on modernizing clients’ applications and reimagining their workflows with AI. 

Finally, even with a very successful new product introduction in the second half of 2019, IBM Z revenue still grew in 2020, with the z15 now shipping the largest capacity in the platform’s history. Obviously the Z avoided a case of COVID-19. Only wish the 500,000+ others who died did too.

DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghost-writer. Follow DancingDinosaur on Twitter, @mainframeblog. See more of his work at technologywriter.com.

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