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Neon revs cost-cutting mainframeware

zPrime risks Big Blue ire

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A small mainframe software tool developer called Neon Enterprise Software has opened up a can of worms - and quite possibly several cans of Big Blue whoop-ass - by launching a new tool that will allow customers to shift a larger percentage of their workloads from standard (and expensive) mainframe engines to the cheaper specialty System z mainframe engines known as zIIPs and zAAPs. It's called zPrime.

With around 10,000 footprints worldwide, maybe somewhere around $4bn in mainframe sales a year, and heaven only knows how many billions per year in monthly rentals for mainframe operating systems, databases, and middleware, IBM is very protective of its mainframe franchise monopoly. And products like zPrime - while technically doable and presumably legally defensible - strike fear into the hearts of IBM's mainframers.

We've seen this before. IBM put governors on the performance of green-screen RPG and COBOL workloads on its AS/400 proprietary minicomputers in the late 1990s, and a few different clever software developers figured out ways around the governors. This resulted in much consternation at IBM, legal battles with the governor buster, and eventually a settlement in the courts where the terms of the settlement were not divulged. It's widely believed that IBM gained all rights to the tool in exchange for cash. (You can see the whole saga here).

Because mainframe shops pay the highest prices in the world for hardware and software - think 2000 prices for hardware and something like 1990 prices for software, and I am only half-joking - Big Blue has been tweaking things here and there over the years to try to make the mainframe more competitive. Different classes of machines have been given different pricing, such as lower software fees for entry mainframes a few years back. Then customers were given metered pricing options for monthly software rentals, based on a metric that IBM calls Metered Software Units, or MSUs, which allowed them to pay for software on a capacity-over-time basis instead of on a per-machine or per-engine basis.

In 2000, just after Big Blue caught the Linux bug, IBM decided to designate some of the mainframe engines in a processor complex as specialty engines, including the Integrated Facility for Linux (IFL), which turns a standard mainframe engine into one that can only run Linux and workloads that have been ported to the mainframe variants of Linux. (And, as of last November, OpenSolaris and its "Sirius" mainframe port can go on the IFLs). The IFL has been very popular at IBM mainframe shops, and has been instrumental in the stabilization of mainframe revenues and MIPS shipments.

The IFL was followed up in September 2004 with the System z Application Assist Processor (zAAP) for offloading Java and XML workloads from the central processors (CPs) running z/OS and IBM's WebSphere middleware. In June 2006, the System z Integrated Information Processor (zIIP) debuted, accelerating DB2 databases by offloading certain functions from the CPs running z/OS and DB2 to these zAAPs.

By early 2007, the last time I have seen IBM talk publicly about its MIPS installed base, IBM had an installed base of 11.074 million aggregate MIPS, and about 1.2 million MIPS of that were for specialty engines. And in the most recent quarter IBM talked about, the first quarter of 2007, specialty engines accounted for 60 per cent of the total MIPS that IBM shipped.

Because they cost about one-quarter the price of regular mainframe engines, these specialty engines don't contribute to the bottom line the same way as those CPs. But imagine what IBM's mainframe business would look like without them. It would be a declining footprint with declining aggregate power and declining sales, not a stable footprint with growing aggregate power and somewhat stable sales.

Enter Neon Enterprise Software and its zPrime tool.

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