IBM recently hosted a System z Summit for customers and industry types, and at this summit the company did something exceedingly rare in the secretive world of mainframe marketing: they gave sales numbers for System z. It turns out that the venerable mainframe, typically thought dead by even the most technically savvy PC users, still rakes in a ton of money for the company that invented the modern instruction set architecture (ISA) with the System z's predecessor, the System/360.

IT Jungle's Timothy Prickett Morgan was on hand at the summit to talk to IBM's vice president of worldwide sales for System z, and he produced a great article with lots of good data and slides. I'll talk about a few of the highlights here, but I encourage you to read the whole thing.

IBM told Morgan that there are only 10,000 System z sites in the world but that those 10,000 sites generate billions of dollars in hardware sales. Those sales have increased recently, according to IBM, and are now at a high that the company hasn't seen since 1998. When you add in the additional billions in sales of software (65 percent of System z revenue is from software), storage, and peripherals, then you're talking about massive revenues from a miniscule installed base.

With high profit margins and huge revenues, it's easy to see what the appeal of the mainframe is to IBM. But what's its appeal to the businesses that invest in it?

I follow PC hardware much more than I do mainframe hardware, but it appears that the ongoing draw of the mainframe rests on a combination of legacy support and RAS features, with performance factoring into the picture in a way that might at first seem peculiar but is actually identical to how performance works in the PC space.

A long legacy

When IBM launched the Australopithecus of the z series line, the 1960s-era System/360, the company did more than just unveil what would become the quintessential mainframe computer system. The System/360 also singlehandedly introduced to the world the idea of legacy code, and with it, the era of modern computer architecture. By the then novel method of inserting a layer of abstraction—the instruction set architecture (ISA)—between the programmer and the machine's microarchitecture, IBM enabled programmers to write code for one machine that could not only be used across the entire line, but could also be used with little or no modification on later versions of the system. Though Intel's later x86 ISA went on to become the most commercially successful ISA of all time, we have IBM to thank for the concept of backwards compatibility.

So legacy support is built into the System z's DNA, and this mainframe's ability to run decades-old (but still mission-critical) programs at blistering speeds is what makes it such a cash cow for IBM. Indeed, when a company has profit margins on a product that are rumored to be as high as 85 percent (according to Morgan in the IT Jungle article), this is a clear sign that there's a substantial amount of vendor lock-in at work.

The performance question

Much to the chagrin of HP and other high-end vendors who'd love to replace mainframe hardware with clusters based on newer, high-performance products (e.g., Itanium), IBM's System z doesn't have to offer market-leading performance on "Linux" generically defined. Indeed, as HP points out in its anti-IBM mainframe marketing site, IBM doesn't publish standard Linux benchmarks for its mainframe line. That's because they don't have to.

In the world of the System z, and indeed in the much wider world of commodity x86, performance factors into the sales and growth picture a way that so many programmers and enthusiasts still don't seem to really grasp. IBM gets paid to deliver generational performance increases on System z code (typically one of the z series-specific OSes plus the application stack), just like Intel and AMD make their money in the processor market by delivering not "performance" (or even "Linux performance") generically defined, but x86 performance. So despite the popularity of high-level languages (HLLs) like C/C++, Java, FORTRAN, and so on, and despite the remarkable success of binary translation (BT) in delivering stellar performance on translated code, ISA still matters... a lot.

To see how much ISA-related legacy software issues matter, take a look at the System z's processor hardware. The System z's main general purpose CPU is an unglamorous, relatively low-clockspeed, in-order processor whose main selling points appear to be RAS functionality, legacy support, and high-bandwidth connections to other devices in the multichip module and wider system. This general-purpose processor is ganged together with any number of more specialized processors, so that System z's hardware provides enough performance for code in the System z ecosystem to extinguish any desire that a System z shop might have to incur the huge costs associated with switching to an entirely different software ecosystem.

In other words, it seems that what keeps the venerable IBM mainframe going is that its total cost of ownership (TCO) is low enough and its performance high enough that the up-front cost of switching to a completely different hardware/software system is not amortized by the lower TCO (and higher performance) of a competitor over a long enough time horizon. Or, in plain English, this means that nobody risks getting fired for just upgrading the old System z, as opposed to pulling the trigger on a migration away from the mainframe entirely.

Indeed, one gets the sense that, instead of eyeing Itanium clusters wistfully, IBM mainframe customers are relatively satisfied. And why wouldn't they be? IBM aggressively develops the z series to the tune of $1.2 billion/year in R&D, and the company's broader support and consulting services are so successful that hardware sales now account for the minority of IBM's global revenue. This kind of services and software commitment, when combined with the ongoing success of the mainframe's installed base, is enough to put a spring in any IT manager's step.

As far as the creeping x86, Itanium, and RISC competition is concerned, it's very likely that one day the TCO + performance balance will tip decisively in favor of a System z alternative. As I said above, the z series' hardware is pretty slow compared to its competitors a bit further down the food chain, and at some point the performance disparity will grow to the size where the ISA/legacy barrier will no longer hold. When that day comes, IBM can just move the entire product line over to POWER6 and its successor. ISA transitions still hurt, but because IBM owns the whole z series stack they can do what Apple did and absorb most of the cost of the transition for their customers by throwing technology at the problem.

So while HP wants to sell businesses on Itanium by using the ancient adage, "you can't teach an old dog [i.e., the IBM mainframe] new tricks," it seems that many shops are heeding a much newer adage that dates back to the PC clone wars of the 1980s: "Nobody ever got fired for buying IBM."