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Korean bank dumps Unix boxen for mainframes

Seoul of a new machine

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BC Card, the largest credit card processor in South Korea, is dumping its Unix servers, made by Hewlett-Packard and Sun Microsystems, and moving its processing applications to mainframes made by IBM.

No, time is not moving backwards on the Korean Peninsula. But BC Card, which is a coalition of 11 South Korean banks that handles credit card transactions for 2.62 million merchants and 40 million credit card holders in the country, has apparently had its fill of distributed Unix systems.

In fact, seeing the very low prices - comparatively speaking for mainframes, that is - for the Solution Edition mainframe bundles that IBM launched in August 2009, BC Card decided to move its transaction processing systems to these machines, including IBM's DB2 database, its CICS transaction monitor, the WebSphere application server, and the InfoSphere Replication Server for data integration, and Tivoli Workload Scheduler systems management tools.

As IBM explained it back in August, the Solution Edition bundles aim to have a price that is 50 to 80 per cent lower than buying mainframe hardware and software piecemeal at prevailing prices, and are designed specifically to have a premium over an HP Integrity server running HP-UX of no more than 20 per cent.

IBM says that what won BC Card over, in addition to the lower Solution Edition pricing, was the fact that the mainframes have utility pricing that lets customers activate and deactivate mainframe engines on demand and with software pricing that scales up and down with capacity. BC Card processes hundreds of millions of credit card transactions daily, and says that it can have very unpredictable workloads. The ability to cope with high transaction volumes and not fall over is why companies have been paying such a high premium for mainframes all these years; another is the grief that comes from porting applications off the mainframe.

Sources at IBM say that this is the first Unix-to-mainframe application migration in nearly a decade. That obviously does not count any workloads that were moved from Unix systems to Linux running natively on z/VM partitions on IBM's big iron. Neither IBM nor BC Card would provide details about the Unix systems being replaced or the capacity of the System z mainframes being dropped in to assume their role at BC Card.

The two would confirm is that HP and Sun boxes were displaced, and added that BC Card ran benchmark tests pitting mainframes against Unix boxen to stress test the setups for their security, availability, and capacity. As part of the switcheroo, BC Card has also hired Big Blue for consulting and system integration services.

The BC Card deal caps four large publicly admitted mainframe deals that IBM did in Korea in 2009, including sales at Kookmin Bank, Korean Air, and Korea Exchange Bank Card. IBM also announced a $5m mainframe deal with the First National Bank of Namibia, which has shelled out a total of $15m to get core banking moved into that African nation. Previously, FNB outsourced the data processing for its 400,000 customers to the First National Bank of South Africa. This is the first mainframe ever sold into Namibia, by the way.

In April, an Indian commercial bank, Housing Development Finance Corporation Limited Bank, inked a seven year, $10m deal to create a credit card processing system based on the System z platform to support its 11 million customers. This was similarly the first mainframe deployed at a bank in India, according to IBM. Banks in China and Russia have also bought mainframes in recent years, and they do so because of the I/O capabilities of the machinery. The Bank of China has a mainframe getup that hosts 400 million accounts, has a 3 billion transaction history database, and runs at over 10,000 transactions per second.

Of course, for every bank in an emerging market you can find installing a mainframe, you can probably find one in a mature market that is being displaced by Unix, Windows, or Linux iron. The real issue is can IBM get a net gain in mainframe customers, boost revenues, and keep a talent pool of mainframers around to keep these machines humming. Ironically, as IBM expands the mainframe's appeal by lowering its costs, it may be hampered by a lack of techies with deep mainframe experience.

At the premium that IBM is charging for mainframes - even after Solution Edition bundle pricing - tuning and tweaking and babysitting are not optional. They are economic necessities, and sometimes, customers prefer to be lazy and get cheaper iron they don't have to tune so much to get bang for the buck. That doesn't make one way or the other right or wrong. That's just the way it is. ®

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