Current Affairs

The Mainframe Blog Home

Two Big Deals in the Mobile World

The U.S. Labor Day weekend has not been a restful one in the mobile communications and devices industry. Vodafone is selling its share of Verizon Wireless to Verizon in a blockbuster $130 billion cash and stock deal, and Microsoft is buying Nokia's struggling mobile phone business, other assets, and licenses for 5.4 billion euro (about $7.2 billion).

What have these deals got to do with mainframes? Plenty. The mobile business is still growing rapidly, and mobile devices (smartphones and tablets) are rapidly displacing traditional PCs as the dominant application and information service clients. That growth is increasing transaction volumes and associated batch processing on mainframes. It's also encouraging existing and new mainframe customers to add applications and application functions to their mainframes, especially to support increasing demands for continuous service and improved security given the challenges mobile devices present.

So how can mainframes address mobile platforms? They already do, and it's quite easy to do more. One excellent example is IBM Worklight for zEnterprise which makes it easy to support multiple mobile device types from your mainframe with functionally rich, device-appropriate, secure "apps" and mobile Web user interfaces. Another example is the IBM CICS Transaction Server Feature Pack for Mobile which is available to CICS customers at no additional charge and which supports lightweight, mobile-appropriate JSON Web services.

The contrast between the two deal sizes is interesting all by itself because it demonstrates where the value has shifted in the mobile market. The smaller Nokia-Microsoft deal is an attempt to combine two weak mobile players into one in order to try to compete with Apple and Google, in particular. The trouble is that Google (especially) has a different business model with lots of services, advertising, and content, and that business model is working well. Google seems to have won the mobile OEMs who were perhaps a bit uncomfortable with Google's acquisition of Motorola, but Microsoft's acquisition of Nokia trumps their mild concern. In other words, Microsoft isn't going to get any help now from Samsung, HTC, LG, ZTE, Lenovo, and other mobile device makers. It'll also be tough for Microsoft to compete against Apple in the premium segment of the mobile device market, and Apple is also strong in content. All that said, I think the acquisition makes sense for Microsoft. Microsoft really doesn't have much choice. Nor does Nokia. When Nokia's CEO, Stephen Elop, a former Microsoft executive (and soon a Microsoft executive again it seems, perhaps even the next CEO) bet his new company on Microsoft's struggling mobile Windows platform, he set in motion a chain of events that would very likely result in Nokia's divestiture of its mobile device business to Microsoft. I don't think too many people are surprised that Microsoft is carving up Nokia now. Cynical observers might even say that was the plan all along.

An interesting footnote is what happens to struggling Canadian mobile pioneer Research In Motion (RIM), makers of the Blackberry. Their new BB10 platform is technically very good, but that's never enough. According to reports RIM is at least open to the idea of selling itself to another company, but there's no perfect suitor available. None of the Chinese companies make much sense given that many of RIM's government customers would flee if such an acquisition came to fruition. HP might make some sense, but is there room for both a third and a fourth mobile platform, and would HP have any chance of finding room in the mobile market given Microsoft's still deep pockets? (Microsoft's Nokia acquisition is another piece of bad news for HP at least in terms of limiting HP's options and in terms of pulling some of Microsoft's attention away from the traditional PC business and OEMs like HP.) Samsung might be interested in acquiring RIM. Samsung would probably take BB10 and merge it with Android, retaining Android application compatibility but adding some more Samsung/RIM differentiation. That'd make some sense if the price is right. Google might have similar ideas, also at the right price. Both Samsung and Google wouldn't mind having RIM's patent portfolio. I don't see IBM being too interested except perhaps for RIM's Blackberry Enterprise Server (BES) software which another suitor might be willing to carve out for IBM, HP, or somebody else. Oracle, Facebook, and Dell are longshot candidates to buy RIM, each for different reasons. Or maybe nobody buys RIM, and we (probably) fondly remember the Blackberry much like we remember Amiga computers.

It's rarely boring in the technology industry.

by Timothy Sipples September 3, 2013 in CICS, Current Affairs, Financial, Web Technology
Permalink | Comments (0) | TrackBack (0)

U.S. Class Action Lawsuit Filed Against Infosys

The Register reports on a new class action lawsuit filed against Infosys in the United States. The lawsuit alleges that Infosys practices employment discrimination on the basis of race and national origin.

I have no idea whether the lawsuit has merit or not. That said, in my view Infosys is going to have a tough time explaining how the demographic makeup of its U.S.-based workforce is not prima facie evidence of widespread employment discrimination in the U.S.

Let be clear on a couple points, though. First, I'm a huge supporter of workforce diversity. Organizations are stronger and more effective, in my experience, when they have workforces consisting of talented individuals with the broadest possible range of experiences, backgrounds, and perspectives. If the lawsuit is correct, that description does not apply to today's Infosys in the U.S.

The other point I would make is one I've made before on a few occasions in different ways. IT choices have great and growing impact on total staffing levels and costs. As businesses continue to try to find ways to reduce costs — or to further pad their profits if you prefer — they will continue naturally focusing on labor costs. This relentless business behavior is a major public policy challenge among other things. Like most countries, particularly among developed economies, the U.S. expects employers to follow a few rules to support some limited public policy objectives. Unemployment insurance is one example among many.

In general, organizations which are taking advantage of mainframe technology, especially new mainframe technologies, have strong, highly labor-efficient IT infrastructures. Yes, that infrastructure requires some competent, experienced individuals who command reasonable salaries and workplace comforts (and should). Greater overall business efficiency and better service qualities are never free. Unfortunately there are many organizations that are not taking advantage of these mainframe-unique efficiencies and that are trying to cope with escalating staffing requirements to manage sprawling IT infrastructure that's increasingly getting out of control. As those cost pressures further mount there will be too many individuals and companies that try to bend or break the rules such as important labor laws.

Maybe I just described Infosys and its behavior, or maybe not. The plaintiffs have to prove their case, and it's not particularly hard to file a lawsuit. I'll be watching this case and other, similar workplace developments to see what they portend for the future of IT employment in the U.S. and elsewhere.

by Timothy Sipples August 6, 2013 in Current Affairs, People
Permalink | Comments (0) | TrackBack (0)

BMC to Sell Itself to a Private Equity Consortium

BMC, a software company with an extensive portfolio of tools for z/OS, has announced it recommends shareholder acceptance of an offer from a consortium of private equity investors to buy all of the company's publicly traded shares. The consortium includes Bain Capital and Golden Gate Capital, and the offer price is $46.25 per share which values the company at about $6.9 billion.

There's a reasonable theoretical argument that companies liberated from quarterly Wall Street reporting pressures will be able to invest more and more strategically in developing their businesses, and that's the argument BMC's management is making. However, the actual results of companies that sell themselves to private equity firms are decidedly mixed.

Golden Gate Capital already owns at least a portion of several software companies including Infor and Attachmate (which in turn owns Novell), so they have some investment experience in IBM zEnterprise-related software companies. Bain Capital owns part of SunGard.

by Timothy Sipples May 6, 2013 in Current Affairs, Financial
Permalink | Comments (0) | TrackBack (0)

Up is the New Down

M.G. Siegler astutely compares Apple and Microsoft with this powerful observation:

Apple’s iPhone business alone is larger than all of Microsoft’s businesses combined. And — just as remarkably — if you took away Apple’s iPhone business... the remaining Apple businesses would still be larger than Microsoft’s total business.

Mainframes are enjoying a sustained renaissance while, increasingly, many observers are wondering if the PC is dead. (No, in my view, but they're getting progressively less important as time passes. Although IBM's management certainly made the right call in exiting the PC business.)

Welcome to the future. Isn't it exciting?

by Timothy Sipples February 6, 2012 in Current Affairs, Future
Permalink | Comments (2) | TrackBack (0)

IBM Buys Cúram Software Ltd.

IBM spent a bit of green — how much is unknown — to buy Irish software firm Cúram. Cúram specializes in software for government social welfare and health services.

Often when IBM acquires a software company one of the first orders of business is to bring that software to the mainframe. But Cúram's Business Application Suite is already available for the mainframe. IBM can focus on expanding Cúram's market presence, especially as part of IBM's "Smarter Cities" initiatives.

by Timothy Sipples December 5, 2011 in Current Affairs
Permalink | Comments (1) | TrackBack (0)

RIM Needed a Mainframe

Has anybody else noticed that IT service delivery is bad and getting worse? Hardly a day has gone by when there hasn't been a big security or availability failure.

For example, Rearch in Motion (RIM), the maker of the Blackberry, certainly needs — needed — a mainframe. The company is already in trouble, rapidly losing marketshare, and now they can't even keep their messaging service running. If businesspeople cannot rely on RIM to keep their Blackberries in service, then they'll stop buying Blackberries. RIM might go out of business as a result of this disaster. How much does bankruptcy cost?

R.I.P., R.I.M.

by Timothy Sipples October 19, 2011 in Business Continuity, Current Affairs
Permalink | Comments (4) | TrackBack (0)

Mainframe Cases Closed in Europe

The European Commission opened two investigations last year into IBM's mainframe-related business practices. The Commission has closed one case without action. In the other case, IBM suggested a solution, and the Commission praised IBM's suggestion but is allowing interested parties to comment.

The first investigation began when T3 Technologies and TurboHercules (later joined by Neon Enterprise Software) lodged a complaint alleging that IBM was guilty of antitrust abuses because IBM refused to license its mainframe software to run with their technologies. T3 and Neon also filed antitrust cases in U.S. court. IBM complained that Microsoft, a competitor which has had significant antitrust problems, was actually providing the funding for these complaints. Also, IBM noted that the company spends billions of dollars to develop new mainframe technologies, that IBM holds multiple mainframe hardware patents on those innovations (including in Europe), that the vendors did not have patent licenses, and that IBM should not be compelled to support infringement of its own patents. Also, there was recent and compelling precedent in the case of Psystar Corporation versus Apple. T3 and Neon lost their related court cases in the U.S., and all three companies withdrew their European Commission complaints early last month.

The second investigation concerned maintenance services for IBM mainframes. Apparently some maintenance service companies in Europe had difficulty winning mainframe service contracts. IBM proposed changes in how it supplies mainframe spare parts and technical documentation. Pending a comment period, that case looks like it's resolved without drama.

by Timothy Sipples September 23, 2011 in Current Affairs
Permalink | Comments (1) | TrackBack (0)

HP's Board Ousted CEO, Whitman Named (Updated)

Original Post: The Wall Street Journal (via The Australian) reports that Hewlett-Packard's board of directors met last night (September 21, U.S. time) to discuss firing current CEO Leo Apotheker. Apotheker began his tenure only in November, 2010.

During Apotheker's short tenure, HP's stock price fell 45 percent. But since rumors of Apotheker's possible departure started swirling earlier this week, HP's stock has rebounded by 10%.

HP is clearly a company in turmoil. The Itanium Meltdown is one big reason, and so is HP's restructuring.

In my view it's perfectly rational for prospective HP customers to hold off purchases (or consider alternatives) while there's so much uncertainty about HP's ability and williness to invest in particular businesses — and even uncertainty about what businesses HP will pursue and not pursue. That's particularly true in a tough global economic environment. I think Apotheker had some good ideas that might have fixed HP 5 or 10 years ago. He is significantly overpaying to acquire the wrong software company (Autonomy), but HP's board had to sign off on that deal and shares the blame. His execution could have been much more graceful, especially with the PC and tablet businesses. (The "we're getting out, but we're not sure how, except we're sure the HP brand won't go with it" announcement for their PC business was bizarre and disturbing.) When Oracle singlehandedly mooted HP's Itanium server business, Apotheker should have struck a deal with IBM along the lines I outlined previously. And Apotheker hasn't addressed how HP will move to where the market will be in 5 or 10 years.

On the bright side, HP still has lots of pricey printer ink to sell.

UPDATE #1: HP's board may name ex-eBay CEO Meg Whitman as the new CEO. Whitman joined HP's board after her losing California gubernatorial campaign in which she spent $140 million of her own money and still lost by over 11 percentage points. That's despite the fact her party won the majority of races in the same 2010 election.

UPDATE #2: New HP CEO Meg Whitman talks with reporters.

by Timothy Sipples September 22, 2011 in Current Affairs, People
Permalink | Comments (1) | TrackBack (0)

What IDC Didn't Say: 2Q2011 Worldwide Server Sales

IDC released its "Worldwide Quarterly Server Tracker" with server hardware sales data for the second quarter of 2011. I'd like to spend a few words discussing this report and its implications.

In IDC's press release there was some "spin," whether intentional or unintentional. Jean Bozman, an IDC analyst, said, "The Unix server marketplace is seeing some rebound in revenue, based on technology refresh for Unix server products from all major vendors." That sounds plausible but, if that were true, we would expect to see roughly equal growth among all the Unix server vendors.

No, that's not at all what's happening. Year over year, the Unix server market grew 1.5% (compared to 17.9% for the overall server hardware market — more on that in a moment). Within the Unix server market, IBM's revenue grew 14.0% and, as IDC noted, IBM gained 6.0 percentage points of marketshare.

Note that IBM had over 50% marketshare in Unix servers prior to this report, but let's consider some simple mathematics and assume IBM had exactly 50%. In order for IBM to grow revenue by 14.0% and the overall Unix market to grow 1.5%, the entire remainder of the Unix market must have shrunk by about 11%. The remainder of the Unix market is mostly HP with some Oracle/Sun, a bit of Fujitsu, and a very little bit of a couple other vendors.

So no, with respect, Ms. Bozman is not correct. The Unix server marketplace saw a rebound based solely on the strength and customer acceptance of IBM's Power servers, which were already far ahead in terms of technology and marketshare and are now accelerating far away from the pack. As predicted here, HP's Itanium server sales crashed. How much did they crash? IDC doesn't say in its press release, but simple mathematics yields a clear answer: "a lot."

IBM's System z servers really turbocharged the server hardware marketplace. IDC reports that System z revenues grew 61.1% year over year, representing 9.0% of worldwide server hardware revenue. IBM mainframes were, by far, the fastest growing servers in IDC's survey. That 17.9% overall growth rate would have been substantially lower if not for mainframe sales.

IDC cautions that these growth rates are unlikely to persist into the latter half of 2011, given global macroeconomic trends. That could well be correct. It's also a reason why, if you're a server vendor, you want to be growing fastest (and certainly not shrinking) heading into any future economic headwinds. IBM has tended to weather economic storms extremely well. If you're buying servers, that's certainly something to keep in mind.

Finally, I would caution yet again that server hardware revenues are somewhat interesting but only part of the hardware vendors' revenues associated with their platforms. That's quite evident with IBM System z mainframes, but it's also true with other types of servers, to varying extents.

by Timothy Sipples August 30, 2011 in Current Affairs
Permalink | Comments (1) | TrackBack (0)

Come On, Irene: Tips for Disaster Preparation

The most important news in the world is that a Category 1 or maybe 2 hurricane will come close to the centers of the universe. That would be Washington, D.C., and New York City, of course, which have the biggest populations of English speaking journalists. I remember when a Category 4 didn't get so much TV coverage, and I'm a young intern compared to Bob Neidig.

Hurricanes happen. Even if the TV networks get way too excited about them, they deserve respect. IBM reminds us about preparing for disasters in a timely press release.

By the way, if you (or your service provider) have got a couple mainframes spread across a couple different sites, and you are reasonably competent in using them at least to support your critical business processes, congratulations. "Irene" should blow but not bite. And if you've got some hurricane stories to share, please post them in the comments.

by Timothy Sipples August 26, 2011 in Business Continuity, Current Affairs
Permalink | Comments (0) | TrackBack (0)

HP Announces Big Restructuring: What Does It Mean?

The technology industry continues to make business headlines. Google is acquiring Motorola Mobility to protect and grow its Android franchise, and now HP's new CEO Leo Apotheker makes his big decision to unravel what former HP CEO Carly Fiorina built. Here's a quick summary of HP's actions:

  • HP is either spinning off or selling its PC, laptop, tablet, smartphone, and webOS businesses.
  • HP is acquiring British software company Autonomy for £7 billion (about $11.6 billion). Autonomy's software helps businesses search unstructured data, such as e-mails.
  • The company is providing new, lower financial guidance reflecting additional weakness in sales and profitability. HP also expects restructuring charges.

Wall Street is reacting quite negatively to HP's announcement. As I write this, HP's stock is trading about 18% lower than yesterday's closing price, which was already beaten down as some of the news broke.

Most analysts have focused on HP's exit from the PC business, declaring Apple the victor in that battle. I think that's a little overwrought. Nobody except Apple, Intel, and Microsoft can seem to make much of a profit in the PC business. In what's looking like the most brilliant business decision of the decade, IBM exited the PC business in 2005. In the process, IBM got some extra cash when the business was valuable, cash which the company used to invest in other, more profitable businesses, including software. (That cash covered at least one mainframe model's R&D, for example.) IBM also won significant business respect in the fast growing Chinese market, generating a lot of goodwill for the company as it sold one of the world's most iconic PC brands, the ThinkPad. Even though HP's PC business is the world's biggest in volume and revenue terms, it'll be interesting to see whether HP can get anywhere near the value IBM got ($1.75 billion in 2005 dollars, excluding goodwill). The PC market is a lot different six years later, and HP isn't offering its brand as part of the deal.

There are some analysts who are realizing that HP is belatedly trying to mimic IBM's business model. I think that's HP's clear intention, but I also think Wall Street is correct. The odds are long that HP will be able to pull it off. Instead, I think HP may come to more closely resemble Xerox, with HP's printing business anchoring an IT services and relatively small software business. For example, HP is missing a credible enterprise server strategy given the Itanium meltdown, and that's one of IBM's critical factors in its highly successful business model. Moreover, even if HP can replicate IBM's business model, IBM's management has repeatedly demonstrated an exceptional ability to move to where the ball will be, not where it is today.

That said, I admire Apotheker for trying. Oracle dealt him a serious and perhaps near-fatal blow just as he joined HP, and he had to do something dramatic. HP may attract some bidding interest for its webOS technologies, including Palm's patent portfolio. HP's nascient tablet business won't be at all interesting given lethargic sales, so I would expect that part of HP to be more or less liquidated and disbanded. (You might see some closeout $99 HP tablets soon.) I think HP is overpaying for Autonomy, but, as I mentioned previously, there just aren't too many game-changing enterprise software companies still available for acquisition, especially at reasonable valuations. And Autonomy by itself certainly won't be enough for HP to emerge as a significant enterprise software company. It took IBM over a decade to build its software business, and IBM acquired scores of significant software companies along the way, most much more important than Autonomy. HP has a long road ahead.

UPDATE #1: HP may keep webOS but license it to others. Good luck with that. Perhaps LG and HTC will ring up HP to buy some mobile platform insurance if the price is near zero, but Android is still free and Microsoft has deep and desperate pockets. Also, $99 may be too high a price for an HP tablet. Apple's iPads are so good that they run webOS twice as fast.

UPDATE #2: As I continue to read reactions to HP's announcement, I am finding some more interesting questions. For example, would many people buy HP PCs, laptops, or Itanium servers now? When IBM exited the PC business, a deal was struck in private. In late 2004, IBM announced that Lenovo, already a major PC company, was buying the business. There was a lot of detail immediately available about how Lenovo would run that valuable business, including their plans for expanding the ThinkPad line, specific IBM executives who would join the company, investments in the U.S., etc. All of that detailed transition information reassured current and potential customers as soon as the news broke, and both companies kept their promises. In contrast, the #1 volume PC maker has just announced that they're exiting the business, but there's almost complete uncertainty about where that business will end up and what it will look like. The only decision that has been made is that the HP brand won't be part of the spin-off or the sale, which is hardly reassuring. (Lenovo had rights to the IBM brand for up to five years, and customers knew that IBM would zealously guard its valuable brand.) Dell, Toshiba, Sony, and of course Apple make wonderful PCs and laptops, so there are plenty of other options besides HP. Why did HP announce a business exit without any transition plan? It's weird and confusing.

by Timothy Sipples August 19, 2011 in Current Affairs
Permalink | Comments (5) | TrackBack (0)

Brief News Roundup for Mid-August, 2011

Here are some interesting mainframe-related stories from around the world:

  1. ComputerWeekly interviews 18-year old Danish mainframe engineer John Prehn.
  2. Data Center Journal reports on "Big Iron Today: The State of Mainframes." Answer: The state is excellent.
  3. T3 Technologies, TurboHercules, and Neon Software Enterprises have withdrawn their complaint lodged with the European Union's antitrust authorities against IBM. T3 and Neon both lost U.S. court cases against IBM earlier this year.
  4. The Wall Street Journal writes: "Behind the Youthful Sales Surge for IBM Mainframes."
  5. Aptly named Micro Focus is looking for a white knight. Meanwhile, Compuware and BMC beat earnings estimates.

by Timothy Sipples August 15, 2011 in Cloud Computing, Current Affairs, People
Permalink | Comments (1) | TrackBack (0)

IBM Announces 2Q2011 Earnings: Mainframe Up Big Again

The IBM mainframe keeps roaring ahead and gaining marketshare, with IBM reporting that System z hardware revenues increased 61 percent in the second quarter (versus the year ago quarter). MIPS, that classic measurement of mainframe capacity, increased 86 percent. (See this post for more insight.) IBM's CFO Mark Loughridge noted that IBM has added 68 new mainframe customers in the past year. About a third of those are in IBM's "growth markets" (i.e. outside North America, Western Europe, and Japan) — "planting the flag," he said. Loughridge also remarked that System z had its best four quarter period in five years.

IBM does not report other System z-related revenues separately, such as mainframe software and services, but in the aggregate those parts of IBM's business also performed strongly.

A year ago (last September) the zEnterprise 196 started shipping, so the next quarter's performance will be judged against that strong quarter. However, the new zEnterprise 114 starts shipping this quarter.

by Timothy Sipples July 18, 2011 in Current Affairs, Economics
Permalink | Comments (4) | TrackBack (0)

More Itanium Meltdown News: HP Sues Oracle

In the wake of Oracle's decision to cease all development of new Oracle software releases for Itanium-based servers, Hewlett-Packard has filed a lawsuit against Oracle. HP accuses Oracle of anti-competitive behavior. Oracle issued a statement which ends with this sentence: "Intel’s plans to end-of-life Itanium will be revealed in court now that HP has filed this utterly malicious and meritless lawsuit against Oracle."

I'm not a lawyer, but it's hard for me to imagine HP prevailing in a lawsuit. Even if Oracle is anti-competitive, what's the remedy? Would a court order Oracle to continue writing software for a particular platform? Which products, for how long, and would anyone want to buy products Oracle didn't want to create but which a court forced them to ship? In all the cases involving anti-competitive behavior that I recall, any legal remedies involved stopping a particular activity, disclosing information, and/or a financial settlement. None of those remedies are going to solve customer problems in this situation. Also, Oracle will no doubt point out that they continue to develop software for IBM platforms (AIX and Linux on System z), for Linux running on HP servers, and for Microsoft Windows running on HP servers. Furthermore, Oracle would argue that they were only following Red Hat and Microsoft in abandoning HP's Itanium servers. In other words, the market has spoken, and no vendor should be required to support a fading UNIX platform longer than they wish — and, besides, Oracle has done more to sustain Itanium than anyone. Moreover, history is littered with fading UNIX platforms for which vendors no longer develop new software: Silicon Graphics, NCR, SCO, NeXT, Data General, Wang, etc. HP has discontinued development and/or support for many operating systems, too. Are any Tru64 or MPE/iX customers happy with HP?

There were a few HP customers that were lobbying Oracle to reverse or at least modify its March announcement. The odds of that happening were always low, but the lawsuit (and Oracle's response) have dropped the odds to zero. Oracle isn't coming back to Itanium.

I suspect HP knows they cannot prevail in court, but sometimes it still makes business sense to file. As I mentioned previously, most Oracle-HP customers, now that they are forced to choose sides, will choose Oracle. Software trumps hardware, quite simply. However, some percentage of customers find alternatives to Oracle. HP probably hopes that this lawsuit will encourage more of those customers to side with HP. We'll see.

For prior analysis of the Itanium Meltdown, including recommended solutions and strategies for Oracle-HP customers, please see here, here, and here.

by Timothy Sipples June 15, 2011 in Current Affairs, Systems Technology
Permalink | Comments (9) | TrackBack (0)

Microsoft Overpays for Skype?

Microsoft is paying $8.5 billion to acquire Skype, the voice and video chat service. Plenty of investors and analysts, including The New York Times, think Microsoft is overpaying. I tend to agree. That's an extraordinary amount of money, and it's also hard for me to see how Microsoft recoups its investment.

If you think about computing at the most basic level, there are only three dimensions: processing (CPU), storage (memory, disk, etc.), and input/output (networking, communications, etc.) It's a historical accident, really, that the price of processing and storage collapsed earlier and faster than the price of global networking. Skype is a byproduct of the collapse in networking costs. What used to be extremely expensive -- a long distance call between, say, New York and Istanbul -- is now almost free. Skype competes against the classic telephone networks which were (and in some cases still are) national monopolies. A few countries have tried to ban Skype in a futile attempt to protect those monopoly rents.

The asymmetric price collapse in these three dimensions of computing helped foster the PC revolution, "client/server" computing, and similar styles of computing. The motivation was simple: processing (especially) and storage were very cheap, and networking was very expensive, so why not deploy those two computing dimensions everywhere and de-centralize? And that cost-driven pattern caused many people to question the whole premise of mainframe computing, in particular. With more years of hindsight, though, we now know better.

If you can capitalize on and, better yet, lead a rapid change in economics, shaking up an entire industry, that's a great business to be in while the adjustment happens. However, is Skype "sticky"? Do consumers find Skype essential? I don't think so. Google Voice and Chat, Yahoo! Messenger, Apple FaceTime, Fring, Lotus Sametime (now available for System z), and scores of other services offer the same or better options. As I write this blog entry, I'm listening to a colleague in Russia talk with a colleague in Australia, and I'm not using Skype, but I am using voice over IP. Therein lies the problem: it's easy for somebody else to enter the same market.

Another problem is that most people still buy mobile carrier-subsidized handsets. Microsoft has been trying to break into the mobile device market with Windows Phone and inked a big deal with Nokia. Microsoft is openly talking about putting Skype in every Windows Phone device. That's fine technically, but the mobile carriers will hate the idea and will be extremely resistant to distributing Windows Phone mobile devices. Maybe the mobile carriers are fighting a losing battle, but that battle isn't over yet, and Microsoft has an investment to recoup.

by Timothy Sipples May 11, 2011 in Current Affairs, Economics
Permalink | Comments (3) | TrackBack (0)

Maybe It's Time for More Mainframe Solutions


Sony reports a huge data breach involving its PlayStation Network. At this writing, Sony has not been able to bring services back online, leaving millions of gamers (and Sony's coffers) poorer.

South Korea's NH Bank also went offline. Preliminary signs point to a sophisticated employee-mounted attack in that case, which wiped out both primary and disaster recovery resources concurrently. Nobody is sure which employee(s), though.

I hope we can all learn from these experiences and others, which unfortunately seem to be growing in frequency and severity.

UPDATE: South Korean investigators now think that North Korean experts were behind the devastating attack on Nonghyup Bank which wiped out many of the bank's credit card records and disabled the bank's core services for several days. Meanwhile, the Korea Internet Security Agency (KISA) reports that 82.7% of South Korean companies do not have any plan for recovery in the event of a disaster or attack. That includes numerous large South Korean businesses. Lack of any DR plan, at least a sub-standard one, would be unthinkable in many countries — and hopefully now unthinkable in Korea. (Photo: Sony executives bow. See the full story at The Australian.)

by Timothy Sipples April 26, 2011 in Business Continuity, Current Affairs, Games, Security
Permalink | Comments (1) | TrackBack (0)

Hey, Gartner: You Blew It

Analyst Joe Clabby wrote an insightful article last year criticizing Gartner for its frequent advice to many customers to move their applications and databases off mainframes and onto other, more "modern platforms." He posed a few simple questions to Gartner, including this one in particular: what platform is more modern than the IBM mainframe?

As far as I know, Gartner never responded directly to Clabby's article. But I'm quite sure that at least some of Gartner's analysts recommended migrating mainframe applications and databases to HP Itanium servers running Oracle middleware on HP-UX. (You can see my previous analysis of the HP Itanium meltdown here and here.)

So now I've got this new question: shouldn't those same Gartner analysts apologize for giving such profoundly bad advice to their customers?

My congratulations to Joe Clabby for vastly outperforming Gartner in IT analysis and forecasting. Clabby simply got it right, and Gartner got it oh-so-wrong. More precisely, many (but not all) of Gartner's analysts blew it.

UPDATE: This video speaks to the Gartner analysts who blew it:

by Timothy Sipples April 11, 2011 in Current Affairs, Systems Technology
Permalink | Comments (0) | TrackBack (0)

IBM Helping HP Itanium Customers and Application Vendors

Previously I offered my thoughts on Oracle's announcement that it is terminating all its development for HP Itanium platforms. This announcement has understandably caused great anxiety and concern within HP's enterprise server community.

I checked to see what IBM is doing to help Itanium customers left in the lurch. HP Itanium platforms run HP's UNIX (HP-UX), OpenVMS, and the NonStop Kernel (formerly from Tandem). Oracle's announcement is a serious blow to these customers, and understandably they are looking for exit strategies. IBM is ready to help with a uniquely complete menu of options. Here are some links to explore many (but not all) of those options:

  • IBM Database Migration Toolkit. This toolkit helps you migrate from Oracle Database to DB2 or Informix for any operating system, including HP-UX.
  • IBM Migration Assistant for Oracle Tuxedo. This tool helps you move Oracle Tuxedo applications to TXSeries and/or CICS for any operating system, including HP-UX. NonStop customers running Tuxedo should also find this tool helpful, and in that case CICS would be recommended to maintain or improve the applications' mission-critical attributes.
  • IBM WebSphere Application Server Migration Toolkit. This toolkit helps you move applications from Oracle WebLogic Application Server to WebSphere Application Server for any operating system, including HP-UX. NonStop customers running WebLogic should also find this tool useful, and in that case WebSphere Application Server for z/OS would be a recommended destination platform. This toolkit also helps Red Hat JBoss customers move their applications to WebSphere Application Server. (Red Hat also discontinued support for HP Itanium platforms.)
  • IBM Migration Factory. This is IBM's Web landing page for server migrations, for example from Itanium/HP-UX to Power servers running AIX. IBM's HP-specific landing page is here.

Those are some of the more popular migration paths, but there are many others, including for VMS and for NonStop. For example, this vendor advertises a NonStop TAL to C/C++ conversion tool. The resulting C/C++ code can then be compiled using an ANSI-compliant C/C++ compiler, such as the compilers for z/OS, AIX, and Linux.

I would advise HP Itanium customers to use time wisely. Start planning now and execute very soon. Consider all options and (probably) choose more than one, in combination, to address your full range of needs.

by Timothy Sipples April 11, 2011 in Current Affairs, Systems Technology
Permalink | Comments (1) | TrackBack (0)

Microsoft Sunsets Zune...and the Mainframe Migration Alliance

Microsoft has quietly disbanded its Mainframe Migration Alliance. Microsoft invited relevant business partners to join the MMA as long as they tried to replace mainframes with (many more) X86 servers running Microsoft Windows. However, with the mainframe enjoying a well documented renaissance, in part because of its leading cloud computing credentials, the MMA has not met its founder's expectations. In fact, the MMA might have actually helped IBM highlight the important functional and non-functional differences between mainframes and other platforms. Keep in mind that IBM sells many types of servers, including X86 servers running Linux and Windows. One size does not fit all.

That said, Microsoft isn't giving up exactly. If you visit the now defunct MMA Web site ( you'll be automatically redirected to Microsoft's "Platform Modernization Alliance." The PMA's mission: move everything (or at least more applications) to Microsoft Windows Server. Mainframes, UNIX servers, several mid-range servers, and non-Microsoft application environments all enjoy equal billing.

This change in strategy strikes me as classic "bean counter" thinking. Why not fund a single "migration" program and save Microsoft some expense dollars? That makes some sense financially but not so much sense technically. Perhaps it's the right business decision for Microsoft, but by definition Microsoft has scaled back its emphasis on migrating from mainframes.

by Timothy Sipples March 30, 2011 in Current Affairs
Permalink | Comments (1) | TrackBack (0)

Welcome, Senegal Customs!

Congratulations to the Customs Directorate of Senegal's Ministry of Finance which is placing into service a new, real-time customs processing system for their officers at all 30 border checkpoints. CFAO Technologies is implementing the new solution which is expected to enter service later this month. Computing technologies include System z10 mainframes, z/OS, and Parallel Sysplex. Simon Pierre Thiaw, CIO of the Customs Directorate, said this:

Senegal's import and export business plays a key role in the economy of the country. By implementing some of the most advanced and powerful IT systems available, we are able to transform our customs processes and ensure that the work we do is performed as accurately and efficiently as possible. While we considered alternative offerings from other vendors, we were convinced by the price/performance ratio of the IBM system.

Senegal is a growing country in western Africa and home to about 14 million people.

by Timothy Sipples February 9, 2011 in Current Affairs, z/OS
Permalink | Comments (1) | TrackBack (0)

The postings on this site are our own and don’t necessarily represent the positions, strategies or opinions of our employers.
© Copyright 2005 the respective authors of the Mainframe Weblog.