Due to the COVID-19 pandemic, enterprises across the globe are struggling to rebalance their priorities and develop income. Buying patterns are altering; customers have needed to tighten their belts; and unemployment has risen drastically. Not precisely a pleasant local weather for driving laptop gross sales, but IBM’s System Z revenues are rising steeply. These machines are excessive finish and positively not cheap. Why is that this taking place?
Background: IBM introduced its IBM z15, the most recent iteration of its mainframe line, virtually a yr in the past, on Sept. 12, 2019. Since that announcement, IBM has reported that it has “shipped the highest MIPS (millions of instructions per second – a measure of raw compute power being used on Z mainframes) in history in Q4 2019, driven by growth in new workloads.”
In Q1 2020, IBM reported “the Z line of mainframe computers within its Systems division was up 59% as sales of the z15 mainframe continued.” IBM additional famous that it had “strong working capital performance, driven by stable collections and good financing attach rates primarily on IBM Z.” During Q2, even with the fast world growth of the pandemic that came about in March and April, IBM z income was up 68%.
Why System Z is in such demand
There are three associated solutions to the Z income development query:
- System Z income historically will increase considerably throughout the first yr after the discharge of a brand new mannequin – often pushed by demand for extra compute energy in addition to enticing pricing (particularly for upgrades). This demand is pushed primarily by massive enterprises that require extra capability and nonetheless rely upon System Z for extremely safe processing (notably transaction processing), together with banks, retailers and insurers. To date, 75% of the world’s prime 20 banks have acquired IBM z15 techniques, and 23 of the highest 25 retailers use System Z. Pandemic or not, enterprises nonetheless must handle their funds; companies nonetheless must course of transactions; commerce continues. Also noteworthy, the pandemic has precipitated a spike in contactless/cashless funds through bank cards, debit playing cards, and so forth. – serving to extend the variety of transactions that have to be processed – a reality which will even be contributing to elevated gross sales of System Z.
- The second cause regards new workloads. In a current analysis analyst briefing, IBM attributed among the current System Z income development to the seize of recent workloads and “movements to IBM z15.” Where is the expansion in new workloads coming from? It seems to be like IBM’s acquisition of Red Hat is paying dividends for System Z – with stable development of Linux workloads on IBM’s Z and LinuxONE platforms. Between Q2 2019 and Q2 2020, IBM has reported to have seen a 55% enhance in Linux MIPs – with 92 of IBM’s prime 100 Z shoppers operating Linux workloads on the platform. These workloads embody server consolidation (as a result of Z can consolidate extra servers extra successfully than x86-based platforms), in addition to new cloud workloads (assisted by final yr’s IBM pricing motion (see https://bit.ly/2DnjYlF ) that stage the enjoying area cloud prices in contrast with x86 platforms – whereas additionally providing stronger safety and resiliency than x86 can present.
- The third cause pertains to new options/product choices. IBM System Z…
