Revenues for the zSeries down 16%
By Luke Meredith
IBM Thursday announced its zSeries revenues for the first quarter of 2005, and after the year Big Blue had with its mainframe line in 2004, the news was not especially good.
Revenues from the zSeries decreased 16% compared with the prior-year quarter, and the total delivery of zSeries computing power as measured in MIPS (millions of instructions per second) decreased 11%.
While the words decrease and revenue are never something IBM wants to see in the same sentence, Charles King, principal analyst at Hayward, Calif.-based Pund-IT Research, warns folks not to get too worked up over the latest numbers.
"It's probably the market settling out a little bit," King said. "The first quarter tends to be a bit flat, and frankly the Z had a real bang-up year last year. Sales of the Z were far better than anyone expected. One quarter doesn't make a trend."
The mainframe, long left for dead by many analysts in the industry, has managed not only to survive, but thrive over the past few years. Revenues for the zSeries jumped 33% in 2003 and saw gains of 34% in Q1 2004, which was followed by consecutive quarters of 12% growth. Though revenues finally slipped slightly in Q4 2004, MIPS jumped 6% during that time.
Gordon Haff, an analyst with Nashua, N.H.-based Illuminata, agrees with King's sentiment that it's too early to dub this downturn a trend. But Haff said you can't argue with the fact that IBM's mainframe sales have hit a wall since the fall of 2004.
"If next quarter were to be down, that's when you go, 'Yeah this is a trend,'" Haff said. "One of the problems when you're doing well is that it can be hard to follow up on that. But for the past six months the Z has clearly not been growing."
But a lack of growth does not mean that the IT community has suddenly lost faith in the mainframe, according to King.
"The performance last year of the zSeries shows that the platform is alive and well and that IBM is on the right track. People still equate the mainframe with the highest reliability, security and performance," King said. "One off quarter does not mean the zSeries has gone down the drain."
IBM zAAP Tool Gains Traction
IBM released zSeries Application Assist Processor (zAAP) last
year as a Java Virtual Machine that could offload Java
application processing on z990 and z890 servers. Now, some
analysts have calculated the potential savings zAAP provides in
terms of cost of ownership, and the numbers are encouraging in
terms of the mainframe's capability to support new Web-centric
architectures.
At least one analyst firm, in fact, reports that zAAP "is one of the
most significant milestones in the continuing resurgence of the
mainframe platform." As Ian Bramley, managing director of
Software Strategies, puts it, "the operational advantages of
single-tier or two-tier mainframe deployment were already
hugely compelling, and now the zAAP brings much improved
economics. We expect the zAAP to be the spark that ignites
strong further growth in mainframe-based J2EE deployment."
Software Strategies recently conducted a TCO comparison of
running a large WebSphere enterprise J2EE application on a
server farm of Sun servers, versus a zSeries mainframe-based
platform. Without zAAP, three-year TCO for the zSeries--
considering all hardware, software, and people costs--was
already 10 percent cheaper a Sun-based server farm, at $13.5
million versus $15 million. With zAAP-dedicated processors, the
zSeries with zAAP platform would cost $9.5 million, or 37
percent and $5.6 million cheaper than the Sun distributed
solution, over this three-year period.
The performance issues around Java code has been a factor
that "has constrained zSeries production deployment of largescale
J2EE applications on the zSeries mainframe until now,"
Bramley observed. "It caused some customers to limit their
overall zSeries J2EE deployment volumes because of
mainframe capacity consumption costs, or to restrict the number
and size of zSeries partitions within which they run WebSphere
Application Server for z/OS because of software licensing costs,
or both." That's because J2EE applications consume on
average 2- to 2.5-times the machine resources as the same
functionality implemented in COBOL or other 3GL languages,
he added.
zAAP is a specialized processing unit that provides a z/OS Java
execution environment on the zSeries platform. When
configured with general-purpose processors within logical
partitions running z/OS, zAAPs are designed to operate
asynchronously with the general processors to execute Java
programming under control of the IBM JVM. IBM states that this
helps reduce the demands and capacity requirements on the
general-purpose partitions. "The zAAP is a true industry-first for
IBM, the only specialized processing unit for Java workloads
currently offered on the market," Bramley said.
Across the Board, Mainframe Usage Holds Steady
Our friends at Evans Data shared these data points with us:
There appears to be a rebound in the percentage of large
enterprises planning to deploy mainframe-based applications
within the next one to two years. In Evans' latest survey of
organizations with more than 2,000 employees,
42 percent of
respondents will be deploying applications on mainframes--up
from 38 percent a year ago. Many are looking at Web services
and SOA deployments for their mainframes, as well. Interest in
breaking down processes embedded within midrange and
mainframe systems and wrapping them as Web services
components has grown over the past year, from 36 percent in
2001 to 45 percent today.
