BMC: Mainframes Aren’t Going Away

Even while rumors continue to circulate that is trying to unload its z Systems business, evidence continues to emerge supporting the ongoing — if not growing — need for the . Key findings from the 2016 BMC Mainframe Research Report indicate that mainframes are helping drive Digital Transformation, with ‘superior reliability, performance, and security’ cited as key factors influencing mainframe investments. “With 89% of survey respondents ( more than 1,200 executives and technical professionals) projecting continued strong support for the mainframe, it is clear that companies view the mainframe as a long-term platform,” said Bill Miller, president of ZSolutions Optimization at , in a prepared statement.

It is also clear that the company has a vested interest — and 25% of their annual revenues — tied up in mainframes, but as BMC’s John McKenny, VP Marketing and Customer Support of ZSolutions, told IT Trends & Analysis, the research data, including the information they keep private, provides a better understanding of what the different customer segments are doing, and looking for. The respondents fall into three categories:

-58% are in the increasing group and looking to grow their investment and use of the mainframe;

-23% indicate they will keep a steady amount of work on the mainframe; and,

-19% plan to reduce the usage of the platform.

For the third segment, reducing cost was the number one concern, said McKenny. They are “not going to get off in the next few months… or years… and we have developed solutions that can help with cost,” he added.

One of the interesting findings with the ‘increasing group’  was that automation and analytics had risen to the fourth priority. “From a tactical perspective, we use a lot of this information… we have a lot more that we don’t share publicly… to help us be laser-focused with customers”.

Server shipments — including mainframes — increased 2% year-over-year in the second quarter, but revenue dipped 0.8%. IBM, which held down third place, was way behind front-runners Dell and Hewlett Packard Enterprise (HPE), and turned in the worst performance, with 9.1% ($1.2 billion) of the market, down -34.4%.

Apparently the z Series was the biggest culprit, with a -40% YoY decline, while the Power-based servers fell a mere -24%. One reason Big Blue may be waffling over selling the business is the profits it makes: with a gross margin of 56.5%, it’s second only to IBM’s Cognitive Solutions segment. Another reason is the upcoming release of the Power9 CPU, which is due out next year and is reported will be competitive with Intel Xeon Servers, something the current generation can’t provide.

According to IBM, mainframes still have relevance, offering 100% uptime, the world’s best security and 68% lower TCO than public cloud. Users include: 92 of the top 100 banks worldwide; 23 of the world’s 25 largest airlines; 70%+ of the world’s largest retailers; 23 of the top 25 US retailers; and all 10 of the world’s 10 largest insurers.

“IBM is still selling more mainframe MIPS quarter on quarter than ever – this is not due to massive growth in its conventional MVS markets, but from those wanting a massive platform for Linux workloads,” said analyst Clive Longbottom at Quocirca. He added that “mainframes will still be here long after you and I are dust.”

The mainframe is just a tool, but new tools are required to unleash the value of the mainframe, said Robert Stroud, Principal Analyst, Forrester Research. His company recommends funding mainframe app improvements through digital initiatives.

‘Organizations struggle to fund modernization for modernization’s sake, but they usually have plenty of money for customer-facing initiatives that create new revenue opportunities. Clearly delineate how improving mainframe application delivery is essential to the success of digital initiatives, and build funding into the digital initiative budget to make the necessary improvements.’

Mainframes continue to provide value, stated analyst Dan Kusnetzky. ‘Part of the reason mainframes won’t die is that often they simply cost less to operate when all of the costs of ownership and workload operations are considered.’

While IDC’s VP of system software research his team would conduct extensive cost-of-ownership studies to determine the relative costs of a workload or an IT solution hosted on different platforms. These studies almost always demonstrated that the costs for hardware and software were typically less than 20% of the total five-year cost of ownership; staffing, networking and power costs typically were significantly higher than hardware and software.

He also noted another issue in moving a workload from a mainframe to any other computing platform:  most mainframe-based applications are tightly integrated with the transaction processing framework, the mainframe database engine, the mainframe storage system and even the mainframe style of IO. ‘So, the attempt to move something from that tightly integrated computing environment would very likely require a total rewrite after a re-architecting of the entire solution to use different tools.’

One of the surprises from this year’s survey were the results involving the long-lamented mainframe skills shortage, said McKenny. “Staffing skills was the number 5 priority for the reducing group, and a much lower priority for the increasing group.”

The reducing group is looking for staffing and skills to port workloads off the mainframe. The increasing group is doing in-house training and hiring experienced staff.

In other news, the company just announced updates to its BMC Discovery solution which make it more open for other systems to interact with while increasing security and efficiency. Additionally, its integration with CyberArk Application Identity Manager improves managed access to scanned environments.

Disclosure: I am an IBM shareholder and remain convinced that mainframes will continue to dominate IT for the foreseeable future (or at least until IBM sells off its z business).

Author: Steve Wexler

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