The Hindu Business Line : Mainframe in comeback mode

How do you shock a visitor from Somers, New York, into silence for a few seconds? Simple: tell her, truthfully, that you are unable to bear the cold weather prevalent in Chennai in December! That's what happened right after Florence Hudson, Vice-President, Marketing & Strategy System Z, spent time with eWorld dwelling on System Z, aka Mainframes.

"Are you serious?" she asked, and couldn't help adding that she was finding the weather too hot to handle. But no guilt pangs here. If the company left eWorld open-mouthed about some of the interesting stuff she revealed about the mainframe, it was the least we could give back. Read on:

Mainframes are going through good times again. Give us the inside dope.

The mainframe is really going through a rebirth. Last quarter and the third quarter of 2006, mainframe revenue has grown 25 per cent in the year. We gained over 5 points of (market) share according to IDC and we are the leader in the high-end service segment — about 20 per cent ahead of the next largest competitor.

The previous quarter we grew at 7 per cent year to year. What is happening is that the key value that the mainframe can bring is being realised by more companies. Mainframes continue to be the only ones to have the highest levels of security for the server - the Evaluation Assurance Level (EAL) 5 certification, for instance. Then, of course, is the total cost of ownership (TCO) there. When you actually put that cost over a number of years versus the total cost of acquisition upfront, the mainframe gives you much more value.

(The benefits come from) consolidating many servers - that require lots of people managing them - versus (immense) self-reliance that the mainframe affords.

What is also becoming increasingly important is the energy efficiency that mainframes offer. Our studies show consolidating many distributed servers onto the single mainframe, your energy expenses would reduce to between a fifth and a twelfth of your earlier costs.

In India, system integrators are educating thousands of people every year on the mainframe and with the mainframe leverage and the great resources in India, we can build a very strong infrastructure not just for working with Indian businesses but also globally with other companies across the world.

From a services perspective it's about moving people to an on-demand environment. We think the mainframe platform is a perfect hub for an overall enterprises services-oriented architecture (SOA) environment.

So we are investing heavily to make sure that people turn to mainframes for Web services, make them part of the overall (Internet) environment moving forwards. We announced that about $100 million would be invested over the next five years to increasingly simplify the mainframe environment.

We would also need to increase availability of skills for the mainframe. We have an academic imitative where we are hoping to touch between 10,000 and 20,000 students worldwide. We have already educated about 10,000 students over the last few years on the mainframe.

When jobs shift to India and China, data centres too move. Do mainframes move along with them or do they buy new machines from you?

It depends. The good news about the virtual world is, with the available security software, you could be anywhere using the Mainframe.

Another thing our clients like to do is to have geographically dispersed systems. If, God forbid, a natural disaster occurs at one place and there is a breakdown there, there's another environment so many (thousands of) km away which can take up the workload again.

So the key thing again is, when anybody uses the term operational supervision, we do a lot of the operating system in hardware and middle-ware to make it fault-tolerant, but should an error occur we'll take the Mainframe image and then take it over to another site.

Does that mean multiple Mainframes across these locations? Or are these just components of a machine spread out?

They are multiple Mainframes. You might have servers in two different places but the disc drives and stuff could be shared and the data is accessible from both platforms. The switchover happens in moments, not hours. In most cases you don't even notice there was a hiccup.

But a client can do his capacity planning and remain flexible on how he wants to do it. A lot of Mainframes can run 80 per cent to 90 per cent busy and what they can do in a fail open environment that may say, I'm not going to buy enough work loads that I'll be at, but enough that they will handle the workload in a serious catastrophe.

The point is, now instead of having hundreds of these things, I have one. It's a fiftieth the size of the house space, 1/5th to 1/12th of the environmental space.

How do Mainframes count on the TCO front?

There is an interesting study that we had of two customers using SAP. One customer went from a distributing environment and onto a Mainframe. Their IT expenditure as a percentage of sales went down from 12 per cent to 9 or 8 per cent. The other customer went from a consolidated environment of a Mainframe to a distributed environment and their cost of IT as percentage of sales went up 2.5 (percentage points).

One analyst actually did a study on a retailer on consolidation. I think it was 600 servers between UNIX servers and Windows servers; 500 applications on Mainframe and they say that it took away 80 per cent of their energy costs... ..they took out a whole floor, a whole floor of the data centre by being able to consolidate.

You could say that with multiple machines, one or even two nodes failing won't affect you. Sure, but the meantime between failures for the mainframes is 30 years plus.

Another thing we did is on capacity handling. One of our clients was first talking about how they were able to just pay for the entire capacity for a little while and they were able to add 22 times that capacity - something they needed (temporarily) for once their Super Bowl ad came out. With those ads, you never know how much traffic you can get there. So they go and buy some capacity for a couple of weeks, borrow from IBM, so to say.

So mainframes as a service, you mean?

Yes. Like capacity on demand. The Mainframe actually has 54 engines in it. You might only turn on eight. The others are sitting there just waiting. It's in the customers shop; it's not that they are using servers from somewhere else. They are in the shop, but we have to be there to turn them on. But it could be either kind of scenario.

Look at the alternative. I've got 200 Unix servers. If I have a spike in demand in the UNIX server, I add more boxes. Think of how long it would take to add more boxes. Then I have a tough technology upgrade on my hands... 200 boxes to upgrade. With the Mainframe, I have eight engines today. I can load more in. I can subtract them based on demand. And, a technology uplift happens overnight.

The Mainframe has a scale-up architecture, which means that I can have multiple copies running and sharing. We have our architects sharing 32 images and they can all be running simultaneously.

You could also take UNIX, Linux and consolidate many, many images on one Mainframe, you know. We can take those same Web services environment and run multiple copies simultaneously in one large container.

India has the largest pool of mainframe programmers and also services mainframe users outside of India. But still, there is a lack of glamour attached to mainframe programming. There is reluctance on the part of people who could be good mainframe programmers but are not. I understand your long-term academic strategy. Anything for the short to mid-term?

Yes. We have an enhanced marketing and communication strategy. The mainframe is really a hidden treasure and what we find is that when kids get to know the mainframe, they get involved. They feel, "I am changing the world. I am supporting the biggest company in the world." When they realise what they can get with the mainframe, they are really into it.

So what we need to do is to publicise the value and the excitement of the mainframe.

There are a number of analysts that are writing more about the mainframe now. We also started an advertising campaign in October - it talks about trust and security and it was targeted at banks. Banks face challenges with database comprises, tapes that fall of the trucks and the like. Data is now encrypted in the mainframe and it is encrypted when it goes out to the data storage - encrypted in the tape as well.

We are trying to message the value from a real, and not just technical, perspective. It means that you store customer data - which means regulators expect you to stay within the guidelines. With this, you do. It can save money.

In fact, if anything, it is about people moving to a service-oriented architecture where they make all their assets available to their customers and suppliers.

It is really increasing acceptance of the mainframe. And we felt our academic initiative is also working well for partners, independent software vendors, the providers and certainly with System Integrators (SIs).

Any industries that tend to take to it more than others?

Financial services has been taking advantage of the mainframe for a long time and one of the big reasons is the security they need for financial transactions. Pharmaceuticals have a great opportunity too. In addition, government, insurance, telecommunications, travel and transportation, airline reservation systems will see great value.

Do mainframes sell better in one part of the world than in others?

I have seen mainframes all over the world. From Brazil to Belgium and so on. There is no specific concentration.

These last five years has been a time of restructuring. What new things have you brought to the table? In 2001, we understand, you were able to monitor usage and hence your clients were able to do. So price per usage was possible... .

One of the things we did was the specialty engines, which were priced inexpensively and it allows you to not only get a specialty engine that focused on job and allowed the software to lighten. Which meant that the software became less expensive than the people in the environment. So you save on both the hardware and the software.

What portion of your revenues comes from usage-based pricing?

I do not have the answer to that. I really wouldn't know, have never looked into that to be honest.

IBM says that its mainframes operate in 20 of the top 25 banks in the world. What portion of the hardware servers do they form in such banks - either in volume or value?

Every customer is different in terms of buying You know there are Windows out there, they have UNIX servers, but how many of each? It depends because some banks, you know, some financial firms will be into banking, stocks and they maybe not insurance, they'll use them all for different reasons. Even in terms of IT budgets, it varies so widely, by customer and by industry.

When you actually go into a sales pitch globally, how does your association with Indian software service providers help?

Yes, it does. We have over 1,300 independent software vendors who work with the Mainframe. We have 300 to 400 in the Linux arena. We have many business partners and some integrators too, that we work with.

A lot of revamp has happened to the structure in the last five years and the objective was to make sure that Mainframes went beyond just high-end customers. Now, what portion of revenue comes from mid-to-lower end customers?

I haven't looked at it that way, recently. But what we did do is announce a business class machine in April this year. I know we sold quite a number of them in the second, third quarter. But I don't know the different sizes and percentage of customers.

But some of those companies I'm talking about, there were 50 to 100 people, there were more people seeing the value of the Mainframe and security has become so important...

Look at a games developer. There's an interesting comparison between gaming and movies. In a theatre, you have a fixed number of seats. If they fill up, you turn the latecomers away. But in an online environment such as gaming, you just add infrastructure to suit the crowd.

In what kinds of applications have you seen growth for the mainframe?

We had the biggest growth on the Web application services, for example, of any other platforms, and a really big growth in Customer Information Controls Systems (CICS) and in Information management Systems (IMS) in the area of transaction processing. We've inserted the Web services support in those two sub systems because today, we can take transactions from either of these systems and turn them into Web service systems. We continue to see significant growth in the sub systems, which have been around for 30 to 40 years!

How are you tackling perception of applications on the Mainframe?

The perception is boring, it's got a big open screen, that kind of stuff. We've recognised that too.

We have new front ends, new faces in these applications while the back end is still running. We put in XML, into our transactions managers, so that all the applications have re-usable content, are accessible and you get direct access.

So you still get the best of a pretty face here, the best of the back end engineering, but still all the available attributes here, serviceability, scalability, all that kind of stuff

You said you would like to simplify the structure mainframe through academic initiatives. What exactly is simplifying?

Simplifying the software is our strategy. It's going to be a million-dollar investment.

It's going to be like a personal trainer for your operating system environment, tell you where you can tune different things, so it kind of automates some of the things you would normally worry about to help you make a better performing system. So we have discussed the new face in these and that's where we put the operational management tooling

A single interface made available to the users to make the administration and operations in the environment and integrate various tools together, so that you don't have to bring them one after the other.

So we are having a lot of emphasis on application tooling and support products that make it easier for the average operational software developer to work in this environment, as they do and make the platform distinction disappear, and it automates lot of their function

They don't want to learn the new things, but to capture the next generation programmers, developers, and operators and teach them the new tooling and make the platform much more accessible to a broader range of people

Are the customers in India similar to the worldwide service providers, software providers, from a certain point of view?

First of all, India is certainly emerging as a market place, FSS, government, big time, we think that we are seeing a lot of interest generated for those industries.

We work very closely with the SIs because they are a nice partner for us with the Mainframe customers who are with us worldwide

We are spending a lot of time with them introducing them to our tooling and our supports

They don't necessarily need to be your customers.

Well, there are partners, there are customers too. Sometimes to install a machine, to create excellence on training, they can get their hands on the machine.

bharatk@thehindu.co.in