IBM Unveils First 2 Lower-Cost Mainframes
International Business Machines Corp., in an aggressive bid to revive sunken revenues in its core business, Tuesday unveiled the first two models of its lower-cost, microprocessor-based mainframes.
Conventional mainframes run on a small number of big, expensive processors. The new computers are designed for transaction processing and database queries.
The new mainframes, with high-powered computing capabilities, are also suited for scientific and technical users, IBM said.
IBM also said it added five new models to its existing ES/9000 family of mainframes, including one model with 10 processors, called the 9X2. This new model provides 22% more power than IBM’s ES/9000 Model 982, which has eight processors.
The Armonk, N.Y.-based computer giant also said it was changing its software pricing structure for mainframe customers to a pay-for-use structure for major systems, a move that would cut costs for customers by up to about 30%.
“The message is we heard you when you told us the total cost of computing is important,” said Nicholas Donofrio, an IBM senior vice president and general manager of the large-scale computing division.
The announcement comes two days ahead of an important anniversary for IBM. On April 7, 1964, IBM unveiled the IBM 360 mainframe, the first system to computerize the Fortune 500. It helped launch the Computer Age.
The 360 was the first important product in what would eventually become IBM’s mainframe empire.
Now, a humbled IBM--struggling to return to consistent profits and revenue growth--has been forced to deal with a confluence of industry events, such as the move by computer users to lower-cost personal computers, called clients, linked by hardware boxes called servers that control data and functions.
Since 1991, computer hardware margins have plunged and IBM’s mainframe sales have tumbled 50% to about $6.6 billion in 1993.
But despite dwindling revenues for IBM’s core mainframes, Donofrio said demand continues to be strong for the ES/9000 high-end mainframe computers and the company could remain sold out of its biggest systems into the second quarter.
Donofrio said the new systems will help solve some of the demand problems.
“I think it’s going to pan out in a very balanced way,” he said, adding that customers who can move some of their data processing requirements to the new parallel server machines will do so. “If they fit, they will go.”
IBM’s announcement comes a week after Amdahl Corp., a Sunnyvale, Calif.-based manufacturer of large-scale computer systems, said it will develop mainframes, called database servers.
Amdahl, which called its earlier announcement a preemptive strike against rival IBM, expects to roll out the first database server “within the next quarter.”
IBM’s new mainframes are based on IBM’s S/390 microprocessors, which are designed using lower-cost technology and are compatible with IBM’s current S/390 mainframes.
