Part 1: Revisiting the Mainframe Utility Computing Model
January 21, 2007 13:10 Filed in:
Technology 3.0
This is the first article in the Forward to the Mainframe? series
Part 2: WinTel, the Luddite Revolution
Part 3: A Virtualization Machine - the X86 Mainframe
IBM's Mainframe Business Model
As the original utility computing device, the mainframe business model enables a company to invest in a system that it can grow with.
With a mainframe purchase, you buy a machine that typically can do more than you need. This "utility" computing model enables you to buy only what you need. Thus, instead of paying a price of two million dollars for unlimited use of a mainframe, you might pay one million dollars to obtain the computing power you need today.
This sounds great until after a couple
years you get that first big holiday rush. You need more capacity,
but you just invested heavily in product and marketing to make this
rush happen. The last thing you want to do is invest heavily in a
partially depreciated computer system. You invest now, because you
have to, but the threat of unexpected investment in the future
makes you start to see your mainframe less as a valued asset and
more like an ax hanging over your head. Despite being less happy,
you stay with your mainframe, because the cost of migration is
high. But when your IT staff mentions an opportunity to put a new
application on a low-cost WinTel server, instead of adding that
application to the mainframe you already own ... you
diversify.
Most people on a logical level, understand the need to pay more to get more. But those same people, on a gut level, feel there is something wrong with paying to "unlock" capability on a system they have already purchased. Their gut tells them that the total cost of the system should be what they paid up front, i.e. one million. They know that the extra million in anticipated revenue by the mainframe maker would not be possible if the market had greater competition and less lock-in.
Factors that promote lock-in and slow competition:
The answer to the mainframe's version of utility computing was of course to increase competition and reduce lock-in. CIO's began slowly increasing their investment in alternatives, working toward the day that they could completely sever every linkage to the mainframe hegemony. "Progress" led the industry though mini-computers and Unix hosts before crowning a new business computing champion, WinTel.
In my next article, we will examine the industry's "progress" from the Mainframe.
RELATED CONTENT
Most people on a logical level, understand the need to pay more to get more. But those same people, on a gut level, feel there is something wrong with paying to "unlock" capability on a system they have already purchased. Their gut tells them that the total cost of the system should be what they paid up front, i.e. one million. They know that the extra million in anticipated revenue by the mainframe maker would not be possible if the market had greater competition and less lock-in.
Factors that promote lock-in and slow competition:
The answer to the mainframe's version of utility computing was of course to increase competition and reduce lock-in. CIO's began slowly increasing their investment in alternatives, working toward the day that they could completely sever every linkage to the mainframe hegemony. "Progress" led the industry though mini-computers and Unix hosts before crowning a new business computing champion, WinTel.
In my next article, we will examine the industry's "progress" from the Mainframe.
RELATED CONTENT
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