Annex Bulletin 2008-07                             February 26, 2008

Nor is Nationwide unique in this respect.  Rising energy costs and environmental concerns are putting pressure on growing computer data centers, with their voracious appetites for electricity. The new z10 delivers the computing power of 1,500 Intel-based servers while consuming 85% less energy and covering 85% less floor space.

Rod Adkins (left), senior IBM vice president of M&D, told the New York audience that IBM itself "will double its computing capacity between now and 2010 without increasing energy consumption or carbon footprint."  Adkins said that IBM currently operates eight million square feet of data center space, and influences and 40 million that its customers run.

"We're about to hit the wall," Adkins said, when it comes to energy consumption.  And the new z10 will help stave that off for a while.

Nationwide's Woenecke said his company was "going to hit the all" in 2005.  But now, thanks to the new IBM mainframe technology, Nationwide will be able to put off a physical data center expansion till 2010.

Traditionally, mainframe computers run at utilization rates of 85% and more (up to 99%+ at Nationwide), while by contrast, the PC-style servers have utilization rates of only about 15%.  As a result, the once costly mainframes, have become the low-cost data center solutions, even if individual machines cost $1 million and up.

"The market economics are moving in our direction, and we’re seeing a return to the mainframe," Jim Stallings, general manager of IBM's Enterprise Systems, was quoted as saying in today New York Times story (Stallings was actually in Mumbai, India, leading the IBM announcement for this important Asian market, while Bill Zeitler, the head of all IBM hardware, did it in Tokyo and Beijing).

Adding executive weight to the importance of the New York launch was Steve Mills, the head of IBM software.  Mills said he reveled in the chance to sell hardware for a change.  His enthusiasm and almost evangelical zeal in describing IBM's virtualization strategy was as infectious as that of the Nationwide customer.

"The z10 is an absolute screamer," Mills raved.  "We have never taken a step this big" when introducing new mainframe technology.  Indeed, the z10 offers between 50% and 100% performance improvement over the z9 which debuted in July 2005 (see "Polaris Eclipses T-Rex", July 2005).

Yet even with the previous generation z9, IBM enjoyed unparalleled success.  Mills said that in 2006, "the fastest growing server in the industry from a revenue standpoint was the IBM System z, not some Intel-based server."  And that's no small feat, considering that there are some 30 million servers in the world today.

Mills hailed the z10 as a "commercial supercomputer" and a "universal server" that can run a broad range of different workloads. 

"We are at a fundamental inflection point in our industry," Mills said, likening the current situation to that in 1974, when the concept of virtual machines first emerged.  There is an explosion of handheld devices around the world, as well as a huge increase in data storage.  Both are straining the traditional data center concepts, and calling for new approaches. 

Besides the z10, IBM also unveiled today what it calls the "new enterprise data center" whose "underpinning is virtualization," said Adkins.  He said that between now and September, IBM will offer 300 free one-day data center assessments to its enterprise customers that will help them decide if the new IBM approach is the right one for them.

At Nationwide, that is no longer a question.  "in two minutes I can now configure new servers for one of our users who wants to test some new idea," Woeckener raved.  "And if the idea doesn't work out, I can remove them just as fast." 

In January 2006, for example, they were able to stress-test the performance of their system at a 22-fold increase in computing capacity, anticipating additional demand due to their new Superbowl commercial. 

You can't do that with any physical "industry standard" (Intel-based) servers, he added.  The fact that all through 2007, their mainframes "had zero downtime from a hardware standpoint," was simply a bonus.

Add to it the IBM System z's legendary "Fort Knox"-type security, and you can begin to understand while the mainframe is experiencing a renaissance (we predicted three years ago - see "Poughkeepsie Spring," Feb 2005 or click on the right image).  For the rest of the year, the only question is to what extend they will boost IBM's financial fortunes as they have already done to its image in the market place.

Annex Clients: CLICK HERE for additional charts and photos