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Guest Author: Rob Enderle, Enderle Group

This week was IBM’s introduction of their newest Mainframe computer. This model, the zEnterprise 114 is targeted at the midmarket. In listening to the briefing it became increasingly clear that IBM was taking advantage of the opportunity that Oracle had created in the market by buying Sun. This had me conclude that Oracle was actually helping IBM revitalize the mainframe market, and given IBM is the only vendor still in that market, that makes for an interesting present from Oracle. 

Let’s explore this.

IBM zEnterprise 114

First, however, I should actually touch on this new IBM System z product. It is a rather impressive offering given that IBM argued this one box could replace up to 40 x86 single processor servers with its three processors. Granted this is only for the kinds of loads, like database, that favor mainframes but it is still an impressive claim. 

Given Sun, now part of Oracle, credibly argued that the mainframe was dead decades ago and was well on the path to replacing it there was some incredible irony to this as now it appears that IBM is helping make Sun’s products obsolete.  

This was done by IBM positioning the product as an anti-Oracle lock in offering. To explain this I need to first explain what Oracle has been doing.

Oracle’s Lock In Strategy

Larry Ellison has been outspoken on his position that he wants to create a company like IBM was in the 1960s where customers were locked into the firm. The only problem is he doesn't really remember how IBM was back then and that was focused like a laser on being a trusted partner not milking the customer for fees. The latter was the IBM of the 1980s and you may recall that IBM almost went out of business.  

As a result Oracle is doing things like charging 50 percent penalties for folks that cancel service and then try to re-enroll and locking out third-party service organizations. He appears to be aggressively increasing customer costs and with the Pillar acquisition, with Larry’s half billion payout, tied to Pillar sales folks are already anticipating surprise increases for this technology whether they want it or not. 

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