IBM's long-standing mainframe has come under siege from cheaper rivals that provide similar levels of reliability, but Big Blue is sparing no effort to ensure the platform stays relevant.
Rajnish Arora, research director of enterprise servers and workstations research at IDC Asia-Pacific, noted that the mainframe has come under "competitive threat" from Unix because of improving scalability and virtualization technologies that are now available at a lower cost.
"The dynamics have changed dramatically," Arora told ZDNet Asia. "Some of the things that were exclusively available 10 to 15 years ago on the mainframe, such as the highest level of scalability and security, are now available on Unix."
The IDC analyst, however, noted that IBM has not been standing still. "They've constantly worked to lower the cost of ownership and acquisition of the platform, as well as [lower] the cost of maintenance and support," Arora said.
According to IDC, the mainframe market has been growing steadily in the Asia-Pacific region, excluding Japan. In 2005, 126 mainframes were shipped across the region. This number is expected to increase to 184 by 2010.
IDC also expects total mainframe revenues to increase from US$377 million in 2005, to US$387 million by 2010.
Analyst house The Butler Group noted that mainframe adoption will continue to grow in existing markets as well as emerging markets, including China, India and South America, due to continued advancements in service-oriented architecture and virtualization technologies on the platform.
David Fergusson, IBM's Asia-Pacific sales executive for System z, told ZDNet Asia: "The positive sheer growth in all markets shows that [the mainframe] continues to deliver what businesses want in terms of security and scalability."
As part of its efforts to build up the mainframe momentum, IBM last year introduced a series of low-end systems, called the System z9 Business Class mainframe.
Arora noted: "What IBM has tried to do with the Business Class systems is to lower the entry-point cost of the hardware, software and maintenance.
"So, even if you've a small infrastructure that requires mainframes, it becomes affordable for you to run specific workloads on mainframes," he said.
He noted that IBM has also been trying to add new workloads onto the mainframe platform, such as industry-standard applications from SAP and Oracle. In October 2006, IBM and Oracle announced a deal to bring Oracle applications such as E-Business Suite and Peoplesoft that run on Linux, to the mainframe System z platform.
However, Arora does not expect IBM to lure many new customers who have not been exposed to mainframes. "It is basically growing its mainframe footprint with existing customers," he said.
For example, a bank that already uses mainframes to handle retail and corporate banking workloads may decide to extend its Linux applications to a mainframe environment for better security and reliability, Arora explained. "But, you won't find a customer buying a mainframe to run Java or Linux workloads if they do not have prior experience with mainframes."
Growing the ecosystem
Apart from gathering broader ISV (independent software vendor) support from the big boys, IBM has also started a program to provide System z ISVs with testing and application porting services.
Fergusson said: "No one's going to buy a computer unless the applications that are relevant to your business can run on it. We're putting a lot of effort in understanding customer requirements before working with ISVs to ensure we can get their applications onto the mainframe, at minimum cost and maximum efficiency."
IDC's Arora said: "Even if you make the platform cost competitive, IBM is going to be pushed into a very addressable niche market if new applications are not ported to the platform."
"[IBM] needs to continue to grow the ecosystem to ensure the platform stays relevant," he added.
IBM is also looking make the mainframe a simpler platform. Last October, it committed US$100 million toward a five-year program that aims to make the mainframe easier to use. Initiatives under the program include plans to develop a more effective graphical user interface, shorten training cycles, as well as reduce the need for specialized skills.
According to IDC's Arora, the number of people skilled in managing mainframe systems has dwindled. "People who have been trained on the mainframe platform are retiring," he said. "If you're not going to regenerate the skills, then companies are going to consider retiring the mainframe platform."
The analyst noted that IBM has addressed this in the last few years through education programs and tie-ups with universities.
According to Fergusson, IBM hopes to inject an additional 20,000 students who are proficient in mainframes by 2010. He noted that universities in China, India, Thailand and Australia are already part of this academic initiative, where students are trained on the company's Z-Series mainframes.
IBM's efforts seem to be reaping dividends, at least, according to IDC's Arora. "If IBM hadn't put in place some of these initiatives, they could have suffered some significant erosion in their mainframe revenues in the last five to seven years."
He added: "Because of all the investments they've made, they've managed to hold on to their installed base".
Still, Arora noted that there will always be mainframe customers migrating to cheaper platforms because their computing workloads may be too small to justify continuing their investments in mainframes.
"This is mostly happening in the public sector, where a lot of mainframe installations were really small, and perhaps, they were able to get the scalability and reliability from other competitive platforms," he said. "But very few financial customers have migrated away from the mainframe to other platforms."
According to William Wu, Intel Asia's regional platform marketing manager, customers looking to migrate from the mainframe platform can choose from range of vendors that offer Itanium 2-based systems, "without being locked into a proprietary architecture" or single vendor.
In an e-mail interview, Wu said that the adoption of Itanium 2-based systems by major global enterprises shows a preference for "flexible systems offering multiple mission critical OS support, including Linux, Windows, Unix and mainframe-class OSes", and at lower cost.
However, despite efforts by IBM's rivals such as Intel and the Microsoft-led Mainframe Migration Alliance, to lure customers away from the mainframe, Big Blue is still gaining traction across Asia, including China.
Arora said: "The top four banks in China are starting to transform their legacy core banking infrastructure, and they are now starting to use the mainframe for a centralized, single view of their entire banking operations. It's just starting to take off in a big way."
In India, however, almost all banks currently run their operations on Unix, he said. IBM has been aggressive with its push for mainframes in the country over the last two years, but Arora noted that platform decisions are made on a long-term basis, typically five to seven years.
"Once banks have decided on a platform, they stick to that environment for a long time, unless something wrong happens to their infrastructure that they need to relook their decisions," he said.
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