IBM's New z10, Financing and Enterprise Data Center Offerings

IBM Corp. announced the long-awaited z10 mainframe and its vision for transforming the Enterprise Data Center. Meanwhile, IBM's financing arm, IGF, unveiled leasing and financing options aimed at making acquisition of the z10 and transformation of the data center more affordable.

Focal Points:

• IBM unveiled the next generation System z10 Enterprise Class (z10 EC) servers last week to replace the z9 EC mainframes. The new mainframe uses a 4.4 GHz quad-core processor chip and has a new hardware decimal floating point feature that eliminates the need for conversion of financial numbers from decimal to hexadecimal and back. There are five different models allowing for growth from a uni-processor (rated at approximately 920 MIPS) up to a 64-way server. The new mainframe supports up to 1.5 TB of memory. IBM claims its performance is 50 – 100 percent faster than the z9, depending on the type of application. Server capacity is increased by 70 percent, while there is a 15 percent improvement in performance per KWh and a 35 percent gain in price/performance over the z9, IBM stated. Additionally, IBM made availability, clustering, and data resynchronization enhancements.
• IBM officials stated it has a new evolutionary model for efficient enterprise IT delivery which it calls its new enterprise data center. The model addresses the new economic demands, rapid service delivery, and alignment with the business. Benefits claimed by IBM executives are triple asset utilization, rapid provisioning, elimination of 80 percent of outages, 40+ percent improvement in energy efficiency, 80 percent reduction in floor space, and 85 percent reduction in disaster recovery time. IBM views a three-stage approach to adoption of the new model: simplified, shared, and dynamic. The simplified model drives IT efficiency through consolidation, optimization, and virtualization. The shared stage provides rapid deployment of infrastructure and services through highly virtualized resource pools, called "ensembles," integrated IT service management, and green design. The dynamic stage allows for the data center to be highly responsive and driven by business goals through use of business-driven service management, service oriented IT delivery and virtualization. The new enterprise data center model is designed to transform people, process, and technology, according to IBM.
• IGF expanded its current leasing and financing options to include the new z10, upgrade financing, hybrids for side by side migrations, and the Economic Stimulus Package for new U.S. equipment on B leases. IGF is also providing project financing and Open Infrastructure Offering (OIO) support for customers retooling technology on a broad scale, officials stated. OIO is a customized IT infrastructure contract designed to provide budget predictability and cost savings over a three to eight year period. As part of the upgrade financing there is a non-disruptive upgrade offering capability that allows for early lease termination. The Economic Stimulus Advantage Pricing enables U.S. corporations to take advantage of the new legislation. Use of the package would allow IBM customers to increase their performance capacity while reducing their month costs.

Experton Group believes IBM's System z10 processor sets a new TCO benchmark and makes an even stronger rationale for workload consolidation on the mainframe. This is true for traditional mainframe applications as well as Linux and other applications that can be ported to the mainframe. IT executives should look for ways to consolidate, optimize, and virtualize applications on mainframes and other enterprise servers so as to enhance operations, improve productivity, and reduce the TCO costs.

Over the next five years most enterprises will significantly modify or upgrade their data centers while simultaneously the underlying technologies undergo massive design shifts. This will provide IT executives with the  opportunity and challenge of re-architecting their data centers to take advantage of enterprise data center concepts such as those offered by Hewlett-Packard Co., IBM, and Sun Microsystems, Inc. IT executives should dovetail these architectures with their own and those proposed by networking, and power and cooling providers to create a data center architecture able to meet projected demands but is flexible enough to address future unpredicted requirements.

IGF continues to develop and deliver new financing options aimed at getting executives to think out of the box when it comes to IT financing. The z10 and Economic Stimulus Advantage offerings are examples of IGF's creative leadership and flexibility. IT executives should work with their finance staff to thoroughly reevaluate their IT financing options to see how they can utilize new offerings such as those from IGF to satisfy IT acquisition requirements. IT executives also should be concurrently aligning their objectives with the CFO's and finance department's goals and objectives.