Verisign Needs a Mainframe

Versign, which Symantec partly acquired in 2010, was hacked. The extent of the data breach is unknown.

Verisign has admitted it was hacked repeatedly in 2010 and could not pin down what data was stolen.

Forbes: "Kids See a Future in Mainframes"

Forbes has published an interesting article about the educational and career opportunities in mainframe computing. Here's a short excerpt:

Quawan Smith, who took [Professor] Dischiave’s course [on mainframe computing], now works at J.P. Morgan Chase, one of the underwriters of the Syracuse [University] program. Smith sees himself evolving over time into the networking side of things, but he found the course and its related lab a real eye opener. “There’s a perception in the tech industry that the mainframe is being replaced,” he says. “But that’s not the case.”

Smith will be cycled through a two-year training program at J.P. Morgan Chase, get a mainframe certification, and then work as technical staff. He’ll then have opportunities to move to other teams within the company. “You can make a pretty decent living,” he says, noting that he is able to cover the rent on an apartment in New York City. How many other 22-year-olds can say that?

How many 82-year-olds can say that?

Learning z/OS the Cloud(y) Way

Marist College is accepting new students for its z/OS professional courses. You can learn z/OS from the comfort of your own home — the courses are conducted online. The deadline for enrollment for the spring term is February 6, 2012. If you miss this term you can enroll for the next term, but why wait?

Class Reunion: "What is a Mainframe?"

Here's an animated video depicting a fictional conversation between two former high school classmates at their reunion. One is now a "genius" bank manager, and the other is a mainframe programmer. One is at least a bit smarter than the other. Enjoy.

IBM Announces 4Q2011 Earnings

Let's get right to the point: the mainframe had what's called a "tough compare" in the last quarter of 2011. A year ago, IBM's System z hardware revenues grew an impressive 69 percent year to year as the zEnterprise 196, with the world's fastest microprocessor, won tremendous favor among existing and new customers alike. That was probably the mainframe's best quarterly hardware revenue growth performance in history, at least when excluding the mathematically infinite growth rate in the long ago quarter when IBM shipped its first mainframe.

Every serious analyst forecasted that IBM's mainframe hardware revenues would be lower in 4Q2011 compared to 4Q2010, and that's what happened. However, there's an interesting and exciting twist. IBM had very nearly the same blockbluster quarter in terms of mainframe hardware capacity shipments that it did last year: MIPS shipments were down only marginally (4 percent). Moreover, the mainframe's gross profit margin was up. Profit is the mother's milk of R&D investment decisions for any corporation, especially a publicly traded one. And, with the application of simple mathematics, it's clear mainframe customers yet again enjoyed substantially lower per-MIPS pricing.

As I always point out when IBM announces earnings — and this time is no exception — mainframe hardware revenues are but a tiny part of IBM's, never mind the industry's, total mainframe-related revenues.

IBM's broader financial results are also quite interesting. While several other technology vendors — including Oracle, HP, and Microsoft — are reporting poor (or at least subpar) financial results, IBM didn't. So far IBM has proven to be remarkably resilient during economic downturns. In fact, there have been many times when IBM has turned recessions and depressions into competitive advantages. In one of the most famous historical cases, IBM's CEO Thomas Watson Sr. refused to reduce the size of his company or cut production during the Great Depression in the 1930s. IBM then was uniquely well positioned to win the new U.S. Social Security Administration's business to solve what was then the world's largest accounting problem. That business strategy was a huge, calculated gamble, but it certainly paid off for the company.

Anyway, this sort of earnings report is exactly what I like to see in a technology company. A company with stable, predictable growth in profits is extremely well positioned to make the long-term investments in research and development to assure a steady stream of exciting, useful technology products at competitive prices, including mainframes and mainframe software. Let's hope IBM keeps up its performance, but to date they're doing well.

Sweden's Tieto Needs a Mainframe

Several government departments in Sweden were down hard for days.

Strange Happenings in the PC Market

Welcome to 2012, faithful Mainframe Blog readers. The year 2011 is history, and now the results are starting to trickle in. Late last year IBM made some predictions about the next five years. I'd like to spend a little more time analyzing prediction #4 and its relevance to mainframe computing. There are two additional pieces of information available to me after writing that post. One is Gartner's report on 4th quarter PC sales, and the other is some careful observation of my family, particularly my sister, during the Christmas holiday.

First let's consider Gartner's report: PC unit sales fell 1.4% globally in the fourth quarter, and U.S. sales dropped 5.9%. HP's PC sales fell 16.2%. Note that these figures do not include Apple's iPad. If you also take out sales of Apple's Macintosh desktops and laptops, total U.S. PC sales (of Windows PCs) fell by 8.6%. (Apple's Mac sales grew 20.7%.)

Those are startling figures, but they are in perfect agreement with IBM's prediction. If the PC were the only way (or at least the "best" way) to access our increasingly digital world, we would expect the so-called "digital divide" to persist for a generation or more. Instead what's happening is that smartphones and tablets are rapidly becoming the most prominent access devices, while the importance of (and sales of) the PC are diminishing.

And I also observed my sister. She has an iPad and an iPhone. I'm not sure if she has a PC, and I don't think she cares whether she does. And for most of the Christmas holiday period and no doubt beyond she was glued to that iPad. She had everything she needed and more to support both the business and fun aspects of her life. And clearly she found the iPad nearly effortless to operate and worry-free. It's hard to break an iPad, in either software or hardware terms. She, and millions of other people like her, across all countries and social strata, are finding non-PC mobile devices much more suited to their lifestyles and needs. And this change is occurring very quickly.

Thinking as an architect, I was also struck by how much she was able to do in such a short time. The intensity of her iPad use was quite impressive and not, it seemed, a temporary phenomenon. As I mentioned previously, the infrastructure required to support the information delivery and transactional requirements of all these cloud-managed mobile devices is going to be astonishing. And it'll be mainframes of one stripe or another that'll do most of the heavy lifting.

I'm very bullish on the future of the mainframe as we begin this new year and enter the post-PC world. Be sure to keep stopping by in the coming weeks and months as we continue to explore the growing world of mainframe computing.

Happy New Year!

New WebSphere Application Server Liberty Profile

A large and growing percentage of mainframes run Java^TM code. Even when you license only z/OS, you get Java at no additional charge. CICS Transaction Server, IMS, DB2, WebSphere MQ, Linux on zEnterprise — the list goes on and on — all support Java. If you want to write or run Java on the mainframe, there's nothing stopping you. Go for it!

I'm quite pleased to see that IBM has announced its beta program for WebSphere Application Server Version 8.5. One major new innovation is the WAS Liberty Profile which supports both z/OS and Linux on zEnterprise. The Liberty Profile for z/OS is tiny (by today's and yesterday's standards): the download is only 32 MB. It starts quickly and consumes very little memory. And you can download the beta version now to try yourself. Of course, anything that can run on the Liberty Profile can also run on WebSphere Application Server if/when you're ready. That's because the Liberty Profile is WAS, but with as-needed/where-needed function delivery, depending on your application's requirements. And yes, of course, you can access all the helpful JZOS methods from the Liberty Profile for z/OS.

I expect this new WebSphere Liberty Profile will be extremely attractive to mainframe customers and to mainframe software developers. (Did I mention it's tiny?) Please go give it a try today and let IBM know what you think.

5 Predictions for the Next 5 Years

In keeping with the season of resolutions and predictions, IBM has gazed into its crystal ball to forecast five innovations that will alter the technology landscape within five years. So let's spend some time considering a couple of these predictions and their impact on mainframe computing.

#2: You will never need a password again. Technically that's no problem whatsoever if you have a mainframe and hasn't been for many years. IBM has done a very good job preserving and extending the mainframe's leadership, positioning the mainframe as the definitive Enterprise Security Hub (or ESH if you like). For example, credit and debit card systems are already getting a lot smarter thanks in large part to the mainframe's security innovations. In an ever more interconnected era (see below) when security is becoming ever more important, more businesses and governments are turning to mainframe-based solutions. The only question in my view is whether mainframe professionals will lead or follow this trend. I vote for the former.

#4: The digital divide will cease to exist. Universal mobile access to computing is going to favor the mainframe. First, there's going to be a direct effect on transaction volumes in existing banking systems, to pick an example. I'm hearing lots of reports that's precisely what's happening, even with only a fraction of the world using smartphones at this point. Second, there will be heightened security requirements (see above). Third, the greater the audience depending on mobile access for services, the greater the cost of service interruptions, thus favoring more resilient systems and solutions. Fourth, the greater the demand, the greater the need for massively scalable systems, i.e. mainframes. That's due to the need for bigger central systems of record as well as worsening data center resource problems in procuring enough space, power, and cooling. The world's telcos, for example, are now seriously rethinking their entire infrastructure which is becoming too costly and unsupportable, after a couple decades of largely unrestrained build-out.

#5: Junk mail will become priority mail. I'm not so sure about e-mail, but the central point here is that transactions are becoming more complex, with more and more heavy information analytics associated with core business processes in order to tailor services much more precisely to customers. That's going to drive the need for massively scalable systems with tight integration. Sound familiar? IBM is right at the vanguard of that trend, with the DB2 Analytics Accelerator as a preeminent example. That technology alone is making whole new analysis-heavy applications possible that were simply never possible before.

What's your forecast? My immediate forecast (or at least wish) is for all of our readers to have a safe, healthy, prosperous, and happy new year.

Oracle Had a Rough Quarter

Oracle reported its earnings for its second financial quarter, which ended November 30^th. One of the big headlines: the company's total hardware revenues crashed below $1 billion to $953 million, down 14% year over year. Its software business was essentially flat on a revenue basis.

Oracle started shipping its new SPARC T4-based machines in late September. We would expect to see a substantial increase in revenue when a new model is introduced, but the opposite happened. Oracle's CFO explained that there were product transition problems which accounted for the drop. Perhaps, but Oracle is predicting that next quarter hardware revenues will drop again from 4% to 14% (constant currency). Keep in mind these figures include Exadata and Exalogic servers, which Oracle claims are growing. (CEO Larry Ellison said Oracle sold "over 200" of those servers combined in the quarter. More on that in a moment.) The bleeding continues unabated.

Another thing Oracle's CFO said should be disturbing to potential customers: "...we believe we could be back at pre-Sun operating margins shortly." If your revenues are declining, how do you increase operating margins? That's simple: you cut costs. Research and development are costs, and they should be big costs if you want to compete and win in the server market.

On the software side, Oracle has had some price increases, so a flattish performance there is also a problem.

Richard Sherlund, an analyst from Nomura Securities, asked a great question on Oracle's earnings conference call. In fact, Oracle promptly ended its call after his question. Sherlund asked, "Larry [Ellison, Oracle's CEO], could you reconcile these numbers you gave for Exadata and Exalogic? I think it adds up to 1,000 or 1,100. Didn't you say 3,000 just recently? And I think the company originally guided to 2,000." You can read what Oracle's executives said in reply.

In part of Mark Hurd's reply, he claimed "...we are taking huge amounts of share from IBM at their high end." IDC and Gartner keep close tabs on the server market, and they report exactly the opposite is happening. Maybe Hurd misspoke and will revise and extend his remarks.

European Commission Satisfied with IBM's Practices

As The Mainframe Blog and other outlets reported this past September, the European Commission and IBM reached agreement on a competitors' complaint concerning mainframe hardware maintenance services. IBM proposed changes in how it supplies mainframe spare parts and technical documentation. However, the European Commission wanted to hear comments from interested parties about IBM's proposed solution.

After that comment period, the European Commission is still satisfied.

In separate action, the European Commission is seeking more information on whether Google's proposed acquisition of Motorola Mobility runs afoul of European competition rules.

Japan's NTT Data Is Rock Solid with zEnterprise

NTT Data is the largest system integrator in Japan. In this video a couple of NTT Data's professionals discuss the new banking solution they're building for the Bank of Japan and the exceptional attributes of zEnterprise, z/OS, and WebSphere middleware products on z/OS.