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The Role of the Mainframe in Tomorrow’s Enterprise

Andrew ButlerVice President & Distinguished Analyst

High Capacity+ Processor+ I/O bandwidth+ Scalability

Mixed Workloads

Reliability, Availability and Serviceability + Hardware+ Software

Security+ Hardware+ Software+ Integrity

Operational Disciplines+ 24/7+ Disaster/recovery+ Security+ Backup/recovery

System Management

Perceived Shortcomings– High hardware costs– High software costs– Proprietary operating system– Not user-friendly

What Continues to Make the Mainframe Unique?

Energy EfficiencyGreen Credentials

Positive Outcomes from Mainframe Market Trends

• Installed MIPS growth has averaged 10 to 20 percent per year (lets forget 2009!)

• MIPS Growth (& Revenue) driven by applications not on the mainframe ten years ago

• Top 25 (World) Banks, 23 of the top 25 (U.S.) retailers, 9 of the 10 largest (WW) Insurance providers use IBM mainframes

• Linux on z – approx. 20% of net new MIPS being shipped• Over 1,300 ISVs on System z today• Over 500 ISVs and 3,000+ Applications for Linux on System z• Facilities (power/cooling) now a mainframe competitive strength• Leader in security, business resiliency, virtualization & utilization• Academic Initiatives –

- 600+ universities teach some mainframe courses- 20,000 new skills by 2010 (org. goal) - over 50,000 have taken at

least some mainframe courses

Principal Mainframe Market Concerns

• Some organizations (mostly small organizations) leave the platform each year (but partly allayed by growth of first-time customers)

• Fewer IBM mainframes installed worldwide as ten years ago• IBM is left alone to promote the new business potential of the

mainframe• ISVs reluctantly and slowly adopting sub-capacity software pricing

algorithms - Priorities not necessarily the same

• Worries about graying of the mainframe skill set• TCO not usually competitive on a single application comparison• Perceptions hard to overcome: Slower to deploy, overly complex,

proprietary, ISV lethargy, “not cool”

Single Largest Inhibitor to Mainframe Growth Within Data Centers

4%

18%

32%

8%

16%

2%

0%

20%

Å Hardware costs

Ç IBM software costs

É Third-party software costs

Ñ Portfolio of the third-party applications

Ö Graying of the skill set/ availability of trained mainfram

Ü Sole source concerns

á Perceived complexity of the mainframe

à Management perception that the mainframe is outdated

49 Voted

Server Market in Numbers – Recovery Underway but Volatility in Many Segments

SubSegment

2009

Revenue

2010

Revenue

2009

Share

2010

Share

2010

Growth

Windows (Server) 5,744.7 6,176.7 50.4% 51.2% 7.5%

HP-UX 998.2 1,035.0 8.8% 8.6% 3.7%

IBM AIX 940.9 1,027.9 8.2% 8.5% 9.2%

Linux (Server) 872.3 1,016.7 7.6% 8.4% 16.6%

IBM System z 910.6 936.5 8.0% 7.8% 2.8%

Oracle Solaris 774.6 749.7 6.8% 6.2% -3.2%

Other Proprietary OS 751.2 730.4 6.6% 6.1% -2.8%

IBM System i 311.5 319.8 2.7% 2.7% 2.7%

Other Proprietary Unix 103.4 62.5 0.9% 0.5% -39.6%

Grand Total 11,407.5 12,055.1 100.0% 100.0% 5.7%

IBM Mainframe Market Has Always Been a Cyclical Story

Mainframe Hardware Revenue Growth Year Over Year

Percentage change,

as reported

Mainframe Capacity Shipments Year Over Year

-50%-40%-30%-20%-10%

0%10%20%30%40%50%

2001 2002 2003 2004 2005 2006 2007 2008 2009

-40%-20%

0%20%40%60%80%

100%120%

2001 2002 2003 2004 2005 2006 2007 2008 2009

Percentage change,

as reported

1Q2Q3Q4Q

2010

2010

The Server Landscape Is Changing Fast for Vendors and Users Alike

1H0893%

1H086% 1H08

1%

1H1091%

1H108%

1H101%

OracleUnix Linux Windows

Operating System Revenue Shares of the Traditional System Vendors

Other = Mainly z/OS, plus IBM "I." Also

some minor x86 OS

Other = Mostly OpenVMS & NSK. Also some minor

x86 OS

IBM's Specialty Engines: The Catalyst for Growth

• Introduced in 2004• Java workloads initially• Applicability now expanding• z890, z990, z9, z10, and z196• Starting with z10 merge with zIIP

• Introduced in 2006 • System z9 and z10 and z196• Initially certain database workloads• Applicability expanding to other uses• ISV support

• Introduced in 2000• 9672 through zEnterprise 196• Went from 127 MIPS in 2000 to

approximately 1200 MIPS in 2010

zIIP

IFL

zAAP

• Lower hardware prices — now including memory!• Investment protection on upgrades• Lower software costs — IBM and third party• Create room for legacy applications to grow• No additional staffing• Continued expansion of use

More than 500 ISVs and 3,000+ applications for Linux on z

Linux on z — more than 20% of MIPS being shipped

Specialty engines (MIPS) — now >20% of installed base

Mainframe Price & Performance Trends: Two Paths Diverge

IBM Cost per MIPS

General Purpose

Special Purpose

0%

40%

80%

120%

20%

60%

100%

2001 2002 2003 2004 2005 2006 20092007 2008

Desire For Use of Open Standards

0

1,000

2,000

2002 2003 2004 2005 2006 2007 2008

500

1,500

IFLs Shipped

0

1,000

3,000

2003 2005 2007 2009

500

1,500

Installed Base — Linux MIPS

2,000

2,500 000 of MIPS

Growth in Linux on System z

Also: Growth in Java on System zü zAAPüJava performance

ü IFL’s equal 17% of WW installed mainframe MIPSü 30-35% of System z users have IFLs installed

What percentage of your mainframe MIPS installed today are represented by IBM's specialty engines:

35%

26%

18%

8%

13%

Å 0%

Ç 1-10%

É 11-20%

Ñ 21-30%

Ö Above 30% 38 Voted

5%

15%

19%

15%

10%

13%

5%

18%

Å The upfront costs of the hardware

Ç Our software license costs would not benefit from a mainfram

É The apps are not supported on the mainframe

Ñ Management does not want us putting more work on the main

Ö We do not believe the workloads will run well on the mainfram

Ü IBM has not provided us enough performance information to m

á The granularity of the IBM specialty engines makes it difficult

à Our Linux people are opposed to putting Linux on the mainfra

39 Voted

What is the single largest inhibitor to your organization using Linux on z:

Market Reaction to Specialty Engines

zEnterprise Unified Resource Manager

§ Unifies management of resources using HMC§ Part of the IBM System Director family,

provides platform, hardware andworkload management

zEnterprise BladeCenter

Extension (zBX)

IBM zEnterprise™ 196 (z196)

§ Selected IBM POWER7™

blades and IBM System x®

Blades*§ Up to 112 blades

configured for HA§ Consistent

toolset for management§ Dynamic

management across platforms

zEnterprise: A New Fabric

Management Network

Data Network

zEnterprise BladeCenter Extension (zBX)• Two types of functions Provided

- Accelerator/Appliance Blade support (Model 001 – z10, Model 002 – z196)• Smart Analytics Optimizer for DB2 accelerator• WebSphere DataPower Appliance (SOD 1H11)

- Cross platform management (Model 002 – z196 only) • Power7 blades with AIX (No Linux support)• x86 blades using Linux (no Windows support at launch, but planned for 2H11)

• zManager Firmware in z196

- Uses consolidated Hardware Management Console- Uses PowerVM for AIX blades and KVM for x86 blades (download from firmware)- Infrastructure Management (two levels)

Manage (core operational controls, installation, configuration)

- Operational controls- Virtual server provisioning- Virtual network provisioning- Hypervisor Management- Energy Management

Automate (Goal oriented monitoring/management of resources)

- Performance monitoring and reporting- Workload context- Performance management- Energy controls- Advanced energy management- Availability monitoring and reporting- Availability management

The Fabric Path Forces Packaging and Implementation Decisions

Note: There is no ideal approach to fabric integration. Many dependencies can exist.

Verti

cal I

nteg

ratio

n

Buy and AssembleBest-of-Breed

Heterogeneous(eg: Most

blade servers)

Stepwise IncrementalModular Integration(eg: Cisco, Dell, HP)

Fabric ResourcePool Manager

Management Suite

Compute Platform

Data Center Switches

Corporate Network

Virtualization Layer

Operating System

Middleware Stack

DBMS

Application Stack

Horizontal Integration

Prepackaged and Tested (eg: VCE, Oracle, HP, IBM)

Fully Integrated Stack(eg: Oracle, HP, IBM)

Storage

Creating a Technology Dependency Matrix for Fabric Based Infrastructure

Mainframe security, availability, and scale…..priced to be competitive with UNIX alternatives

• Building on the Solution Edition for SAP• Special package pricing for IBM’s most popular

solutions- z10 HW (standalone footprint or isolated LPAR)- Prepaid HW maintenance- Comprehensive middleware stack (including S&S)- Services and Storage (as needed)

• Utilizing Mainframe quality:- System quality, security, availability and scale - Integration of applications with corporate data- Industry leading virtualization, management and resource

provisioning- Designed for Investment protection

• Competitive acquisition prices & TCO

§Data Warehousing

§SAP

§ACI

§WebSphere

§Security

§GDPS

§Application Development

System z Solution Editions

Cloud Computing:A style of computing

where massively scalable IT-enabled

capabilities are delivered as a

service to external customers using

Internet technologies

Acquisition ModelService

Business ModelPay for usage

Technical ModelScalable, elastic, shareable

Access ModelInternet

Private Cloud Drivers• Low barrier to entry• Elastic and Scalable• Lower cost and pay per use• Increased agility (to customers)• Ease of sourcing migations• Many cloud benefits – reduced risk

Public Cloud Drivers• Scale on demand• Increased agility and flexibility• Pay per use• Higher compute capacities• Elasticity• Time to market

Why Can't System z be the Underlying Infrastructure for Cloud Computing?

Schools in

programYE03 24YE04 70YE05 213YE06 294YE 07 400+YE 08 500+YE 09 600+

Graying of the Mainframe Staff

• IBM's program now more than six years old• Number of higher education

schools growing• Be wary of student numbers• Mastery exam is the key metric• In the meantime:

- Get HR involved- Invest in college relationships- Online course credits- Encourage mentoring assignments- Do your own in-house training

and cross-training to enable flexible staff use- Talk to your ISVs

IBM's Academic Initiative Is Showing Results….

TCO — Easy to Spell, Hard to Calculate• Reliability/availability• Security• Redundancy• Recoverability • Impact of planned outages• Environmental characteristics

(space, power, cooling)• Take a multigenerational view!• Time to deploy and time to refresh• Scalability• Consolidation capability• Governance/inventory control• Change management controls• Application interoperability• Test and development• Cost of changing platform

Policy Regarding Non-x86 Platforms & Rationalization of Server Architecture?

7%

25%

26%

20%

10%

12%

No architectural standards/policies

Only x86 is strategic

Phasing out Unix in favor of x86 or mainframe

No mainframes; Unix and x86 both strategic

Phasing out mainframe in favor of x86 or Unix

Mainframe, Unix & x86 all strategic

Define — and Police — Your Own OS& Architecture Standards

Enterprise-Critical OLTP, Data Warehouse and Corporate Databases

Application ServersCompute CrunchersBack-Office ApplicationsVirtualized/Consolidation HostsHVDs (Hosted Virtual Desktops)

Web ServersDepartmental SystemsBranch OfficesPoint of Sale

ImmovableMainframe

Installed Base Portfolio

Migrations &New Projects

The IT Market Clock for Servers

"time to next phase"

<2 years

2-5 years

5-10 years

>10 years

End of life

Disfavored Phase• Reducing supplier choice• Increasing costs• Falling availability

of relevant skillsFocus on: Replacement

Commoditized Phase

Focus on: Cost

• Industrialized and modularized offerings

• High level of substitution• Competitive pricing

Mass-Customized Phase

Focus on: Choice

• Growing standardization• Growing competition/falling

prices

Customized Phase

Focus on: Advantage

• Value/innovation focus• Delivers differentiation• Proprietary, high cost• Requires skill and expertise

What Word Best Describes the Mainframe?

Notes accompany this presentation. Please select Notes Page view.These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via e-mail: vendor.relations@gartner.com. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

The Role of the Mainframe in Tomorrow’s Enterprise

Andrew ButlerVice President & Distinguished Analyst